"Hit rate from 50% to 52%" is +2pp, not +2% (that would be 51%). It sounds like pedantry. On this venue it has a concrete consequence: if cost and revenue are stated on different bases, subtracting them can produce the wrong sign.
| Percentage point (pp) | Per cent (%) | |
|---|---|---|
| Measures | an absolute difference | a relative change |
| 50% → 52% | +2pp | +4% |
| 50% → 51% | +1pp | +2% |
| 2% → 4% | +2pp | +100% |
The last row makes the point: the same "+2pp" is a 4% relative change or a 100% one, depending on where you started. And "doubled" means very different absolute things at different bases.
Because it has two quantities that both appear with a percent sign and mean different things:
| Quantity | Basis | At p≈0.5 |
|---|---|---|
| Taker fee as a share of stake | per cent (%) | 3.50% |
| Taker fee per share | percentage points (pp) | 1.75pp |
The same fee, twice the number. Because the denominators differ:
Probably wrong. That "2%" is most likely percentage points per share (which is how strategy excess is normally computed), while "1.75%" may be a share of stake. They cannot be subtracted.
Convert both to one basis:
edge 2pp (per share) vs fee 1.75pp (per share) → net +0.25pp
Correct this time. But subtract the 3.5% share-of-stake figure instead and you get −1.5 — the opposite sign. Same numbers, wrong basis, reversed conclusion.
| Rule | Why |
|---|---|
| All edges in pp | per share, because settlement pays $1 a share so margin is per share |
| Convert fees to pp before comparing | 1.75pp at p≈0.5 |
| "Share of stake" answers only "how much was taken" | it never participates in an edge calculation |
| Every number carries its unit | "+2" is not a number; "+2pp" or "+2%" is |
The last is the cheapest defence: if every figure carries its unit, mixing them is caught immediately. A unitless number passed through three documents loses its basis and nobody can recover it.
An internal note recorded a line's expectation as "about −$110/day", with a parenthetical "about −$65/day after reaching a certain rebate tier".
Re-checking later: that conversion was computed as a share of stake. Recomputed on this site's usual per-share pp basis, the same strategy comes out at about −$220/day — a factor of two.
Neither figure is wrong; they answer different questions. The problem was that the basis was not stated, which turned the number into a time bomb the moment it was quoted.
It is a counterfactual — "net after reaching a tier that would return about $44/day". Its purpose was to show that even with the rebate it still loses.
Printed beside a real figure it reads as "it lost $65 a day" — while that line in fact received zero rebates.
Rulea counterfactual must be labelled as one, with its assumption stated. Otherwise it gets passed on as a measurement.
| Ask | Because |
|---|---|
| What is its denominator? | that is the entire difference between pp and % |
| Does the thing you are subtracting share it? | if not, you cannot subtract |
| Is it measured or counterfactual? | a counterfactual must not travel as a measurement |
| Absolute difference or relative change? | "doubled" means little on a small base |
pp is an absolute difference, % is a relative change. On this venue the same fee differs by a factor of two between the two bases — so before subtracting, confirm both sides share a denominator. Cheapest defence: every number carries its unit.
0.07(1−p); per share = 0.07·p(1−p).
At p=0.5 those are 3.50% and 1.75pp. Verify by hand.