Why can’t TradeSports just make it simple, honest and clear?
OK, here’s the order of events as I understand them:
1. Last fall TradeSports says trading fees are a nickel for price takers (.03 at extreme prices), zero for price-makers; Expiry fees are zero for losers and a dime for winners.
2. Also last fall, TradeSports says positions established pre-season do not incur ANY trading or expiry fees (whether price-maker or price-taker). If you enter a position pre-season and trade out of it during the season, you pay zero fees if you are price-maker on the closing trade and a nickel (.03 at extremes) if you are price-taker on the closing trade.
3. This June TradeSports says they will be changing their fee structure to a profit tax of 4% per market, for new contracts LISTED on or after June 27.
4. TradeSports now says the 4% profit tax will apply retroactively to earlier position, but that if members just let their positions expire as winners and don’t trade out they will pay the original ten cent fee per contract, not the 4%, which can cost up to forty cents (losing expiries pay no fee either way). So the fee increase is retroactive, but there is a loophole that may allow some people to avoid the increase if they are willing to hold their positions to the end.
5. TradeSports then says that the 4% profit tax will apply to ALL closing trades and expirations. This means if you bought pre-season when you were promised zero fees, you have had all your potential profits reduced by 4%.
6. TradeSports reverses #5 and says #4 is the rule.
So… #5 was clearly worse than #4 because under #4 you at least have the possibility of holding a winner to expiration and not actually paying the increased fee. However, #4 is still a retroactive fee change that lowers the value of existing positions. Changing bets after they have been accepted is a cardinal sin for any bookmaker, broker, exchange, clearinghouse or anyone else and TradeSports cannot be allowed to get away with it.
Signed: Deep Throat
External Link: the thread on the TradeSports-InTrade forum
