Turning per-second profit into an annual figure

Question

A strategy nets about \0.50 of profit per trade and does roughly 3 trades every second during regular US trading hours (about 5.9 million trading seconds per year). Solve in your head. Roughly what is its annual profit? Aim: under 30 seconds.

Accepted Answer

Chain profit-per-second up to the year. - Profit per second: \0.50 	imes 3 = \1.50 per second. - Trading seconds per year: \approx 5.9 	imes 10^6. - Per year: 1.5 	imes 5.9 	imes 10^6. Compute: 1.5 	imes 5.9 = 8.85, so \approx \8.85 	imes 10^6, 	ext{ about } \8.9 	ext{ million a year.} Takeaway. Once you know the roughly 5.9 million regular trading seconds in a year, any per-second rate scales to an annual figure with one multiplication. Tiny per-trade edges (here 50 cents) become millions purely through frequency, which is the whole economic logic of high-turnover trading.

Turning per-second profit into an annual figure

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