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The term middle ticket can be used in two different financial environments. When it comes to credit card usage, an average ticket has to do with the average size of individual sales a credit card company makes from customers’ credit card usage. In investment circles, an average ticket can refer to the size of trades executed for an individual client or the total number of trades made by a broker or dealer within a specific time period. In both configurations, the idea behind the ticket is to measure the level of profitability that is achieved with the transaction process, taking into account the costs associated with the transactions.
Calculation of an average ticket begins with determining the time period that will be used to identify the average of increments within that larger period. For example, if the goal is to identify the average ticket associated with each month within a calendar year, the process will begin by summing the individual ticket values for the entire year. This amount is then divided by twelve, which determines the average monthly ticket applicable to that specific twelve month period.
When the average ticket has to do with credit card transactions, the amount is sometimes called the average withdrawal. Here, the goal is to take into account the fees charged to customers who accept credit card payments, as well as the interest that accrues on the balance of these credit card accounts. This provides the credit card provider with data on the amount of earnings generated by transactions during the period of time considered.
Credit card merchants also sometimes take advantage of the fact that calculating the average ticket helps to indirectly identify the current range of interchange fees that may be charged by the various banks involved in the transactions. This can go a long way toward ensuring that the fee structure is competitive with the fees charged by other credit card providers, while also generating a fair return for the service. The process can also help identify the impact of any new types of interbank fees that may have come into use during the most recent calendar year and determine the degree of impact of these fees on overall earnings.
Brokers and dealers also use this model to determine profits generated from transactions executed on behalf of clients. This is done by adding up the calendar year’s transactions and then dividing the total by twelve, taking into account the fees charged for fulfilling orders. The end result is an average return ticket for the month that can be broken down to identify the average ticket for each transaction made for an investor. Information of this type gives the company a good idea of the value of the average profit generated in each transaction, as well as the profit obtained monthly.