So I arbitrarily assume that I have a strategy that gives me 50% return per year.If I invest 1 lkh I get 50k as profit at the end of the year. Assuming I have taken average 40 trades a month(2 trades a day minimal).In total 40*12=480 trades
Now this 50k is inclusive of tax + brokerage services + API cost of Kite.
The cost structure after one year
Strategy Interest earned =50000 Brokerage cost=480*40(both for buy and sell side)= 19200 Api Cost=2000*12 = 24000
Total Profit end of the year = 50000-(19200+24000)=6800(including tax)
So even if my strategy has a good sharpe ratio and 50% return I lose out on the operational costs.
Now I cannot ask for reduction in brokerages.It is way too small.Therefore my question comes to the API costing. Is it feasible? Also why is the API costs not usage centric?
P.S- This is real life scenario of the strategy.Even after 50% return I am not able to productize the strategy.