

Day Trading Outsourced to China - ad
http://www.nytimes.com/2010/12/10/business/global/10daytrade.html?ref=business&pagewanted=print

======
ad
ok I think I figured it out. The key parts were 1) high turnover, people only
last a few months, and 2) the company gets 50%.

Suppose the traders have no insight into the market and trade randomly. As a
whole they incur losses due to costs. To simplify, suppose there is a 50%
chance they will lose 100 bucks, and a 50% chance they will make 90 bucks. The
firms money goes down by 10 dollars, but then they take half of the winnings,
45 bucks, and so thus profit 35 dollars. Is my logic sound?

In summary, they could just be taking advantage of the uninformed chinese
traders. (It goes without saying: the business could be completely legitimate,
can't say for sure from the article. Just seemed a little odd).

~~~
ad
nope, nevermind, I am double counting money there.

