adding liquidity

imagine 10 people on the bid and 10 people on the offer....how many shares trade if none of those bids or offers are hit....shares traded is liquidity.....hey i have been known to be wrong
 
Originally posted by DaqTrader
imagine 10 people on the bid and 10 people on the offer....how many shares trade if none of those bids or offers are hit....shares traded is liquidity.....hey i have been known to be wrong plenty of times.....
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that's right...but if they get hit, then they are adding liquidity..right? I don't really get the whole thing to tell the truth, because it still seems you have to be net positive or at least break even to work. And you can't just be successful on one side of the trade. Even if you scratch, and you get credit on one side, won't you end up losing because the debit on the other side of the trade is greater than the credit you earned?
 
I have no idea how the rebate works....but I assume ur credits have to be more than ur loss in p&l or ur in the whole ...it is exactly what dotslashfuture said, it's like a discount really..
 
Originally posted by dotslashfuture
someone tell me how you can make a living by getting a discount when you buy something ? You make a trade, you pay the fees, then you get a rebate. How can you come out ahead like that without also having a positive p/l ?
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Getting an ECN rebate for adding liquidity(placing a bid or offer)reduces your fees.If you pay .01 per share,get a rebate of .002 per share for adding liquidity,let's say,on INCA,your total cost ends up being .008 per share.
 
Originally posted by DaqTrader
i am talking about adding liquidity.... and sitting on the bid or offer doesnt offer liquidity to the market, it takes it away...someone taking or hitting your bid or offer is the one providing liquidity....
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This is incorrect.When you get ECN rebates,you get them when someone hits your bid or takes your offer.The trader that is hitting the bid or taking the offer is the one that pays the ECN fee.
 
Originally posted by NasdaqTrader


This is incorrect.When you get ECN rebates,you get them when someone hits your bid or takes your offer.The trader that is hitting the bid or taking the offer is the one that pays the ECN fee.
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i am talking about adding liquidity to the market, I never said a word about ECN fees......
 
Originally posted by NasdaqTrader


Getting an ECN rebate for adding liquidity(placing a bid or offer)reduces your fees.If you pay .01 per share,get a rebate of .002 per share for adding liquidity,let's say,on INCA,your total cost ends up being .008 per share.
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Well i think what was talked about was not getting a rebate, but actually working for the ecn and gettin paid to add liquidity. So if that is the case (or that is how i understand it), then the trader is not paying anything per share...only getting the "rebate". Unless I read the whole thing wrong. Anyone can get the "rebate"...this guy was talking about being employed by the ecn.
 
Originally posted by DaqTrader
i am talking about adding liquidity.... and sitting on the bid or offer doesnt offer liquidity to the market, it takes it away...someone taking or hitting your bid or offer is the one providing liquidity....
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sitting on the bid adds liquidity because you are adding shares to the ecn book. you are making the stock and ecn more liquid together. it will be easier to trade that stock on the specific ecn if it is more liquid.
 
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