Best broker for large size equity trading

C

ColdLogic

I trade QQQ exclusively, with an average lot size of 10,000. I'm currently using Schwab CyberTrader, and they are changing their rates (effective 7/24/03). The change will make smaller size orders cheaper, but larger orders more expensive.

After the change, 10K QQQ will cost $35 ($70 round-trip). Schwab absorbs any Island fees/payments (I preference Island often, and remove liquidity often, so this is good for me).

Datafeeds/software are completely irrelevant, as this is all handled by 3rd-party systems. The only software needed is basic order entry (an order-entry API is a plus).

Also, non-direct-access brokers (Ameritrade, etc) are not an option, since my order frequency (avg. 7 round trips/day) makes execution speed/quality very important.

Can anyone recommend a better deal for my circumstances?
 
I was in a very similar situation as you. Only trading the Q's with Tradecast. They revised their fees and it would have been literally impossible for me to make enough money to cover them. Then I switched over to the emini's. Better leverage, less fees. Just give them a try.
 
Quote from ColdLogic:

I trade QQQ exclusively, with an average lot size of 10,000. I'm currently using Schwab CyberTrader, and they are changing their rates (effective 7/24/03). The change will make smaller size orders cheaper, but larger orders more expensive.

After the change, 10K QQQ will cost $35 ($70 round-trip). Schwab absorbs any Island fees/payments (I preference Island often, and remove liquidity often, so this is good for me).

Datafeeds/software are completely irrelevant, as this is all handled by 3rd-party systems. The only software needed is basic order entry (an order-entry API is a plus).

Also, non-direct-access brokers (Ameritrade, etc) are not an option, since my order frequency (avg. 7 round trips/day) makes execution speed/quality very important.

Can anyone recommend a better deal for my circumstances?
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I assume that you are removing liquidity from ISLD on the bulk of your QQQ's orders, correct (i.e. sending an order for immediate execution, marketable order, versus placing a limit order for the market to eventually hit)? Assuming this is correct, then your broker-dealer COST for 10,000 shares executed on ISLD and removing liquidity is 0.3 cents per share (http://www.isld.com/prodserv/bd/fee/fee.asp).

=> This works out to $30 in ISLD fees paid by your broker dealer on every executed order. Also, note that this does not include your brokers clearing fees, overhead costs, profit, etc.

(Note that if your orders are adding liquidity to the ISLD book and being executed, then your broker dealer would get a rebate/credit of 0.2 cents per share, or $20 per 10,000 shares executed).

Assuming that you are removing liquidity from the ISLD book with your orders, then I think you have a reasonable commission schedule. If you are adding liquidity with your orders, then you should find a better deal. You may want to look for a firm that provides clients with a 'pass through' arrangement for all ECN fees and rebates. That way, you will receive the rebates for adding liquidity while also paying the fees when you remove liquidity.

Best of luck,
-Eric
 
Just out of curiosity, do you trade the NQ also? If not, why? Much more leverage and favorable tax treatment with the NQ. Do you just "know" the Q's better?

TIA,

Uni
 
I completely agree with EricP. Why not get paid instead of paying. Find a broker that passes on the rebates. Think about it. 10.000 QQQ equal $20 for adding, if you can get out the same way too, there's another 20. Get in, get out flat, made 40.

As to why not NQ. Simple, commissions. The more contracts the more commissions. If Dollar vol. is same as QQQ trades, then your commissions can add up very quickly.
 
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