It seems that there are only a few US-based retail brokers left that provide actual Direct-Market-Access (for equities).
The 3 seem to be IB, Tradestation and Vision.
For those using Penson-brokers you can more or less expect your order-flow to be sold to HFT frontrunners like Citadel, Citi and Knight.
Don't believe me? Do a search for your broker and "Payment for Order Flow". It will tell you exactly where orders for your penson-based brokers are going.You can more or less expect to be ripped off on the spread for this reason alone.
Although Optionsxpress is supposedly self-clearing, it has as of late been acquired by Schwab which sells client order-flow to UBS. This is an unsettling prospect for Optionsxpress clients.
Also, Genesis Securities has recently shutdown.
TD-Ameritrade, Etrade, etc. also sell their order flow to Knight and Citadel. This is related to Internalization.
To be fair front-running is not only conducted on the retail level, but also on the institutional prime brokerage level to an extent. If you trade through Goldman, JPM, MS, BOA/ML, etc. you can more or less expect to be front-run, the difference is that many money managers are willing to take that risk in order to get access to better margin. That's the catch.
For those that prefer privacy and anonymity, but can't afford a broker-neutral execution platform such as Bloomberg EMSX (Tradebook is a high-end agency broker offered by Bloomberg that apparently offers similar functionality), Reuters Trading, Fidessa, ITG, or Sungard that require 10-20 million AUM, there is always the semi-agency brokerage model. I believe that both Liquidnet and Instinet also have the same 10-20million AUM requirements.
Prime Brokers that utilize a semi-agency model and have limited proprietary trading operations are your best bet. That means Newedge, BNY Convergex and TD Bank. Although, I believe that they require 2-3 million aum for new accounts, it is possible to still obtain access to their services through an Introducing Broker.
So back to the retail-level, does anyone have any alternatives to the 3 retail brokers I mentioned?
The 3 seem to be IB, Tradestation and Vision.
For those using Penson-brokers you can more or less expect your order-flow to be sold to HFT frontrunners like Citadel, Citi and Knight.
Don't believe me? Do a search for your broker and "Payment for Order Flow". It will tell you exactly where orders for your penson-based brokers are going.You can more or less expect to be ripped off on the spread for this reason alone.
Although Optionsxpress is supposedly self-clearing, it has as of late been acquired by Schwab which sells client order-flow to UBS. This is an unsettling prospect for Optionsxpress clients.
Also, Genesis Securities has recently shutdown.
TD-Ameritrade, Etrade, etc. also sell their order flow to Knight and Citadel. This is related to Internalization.
To be fair front-running is not only conducted on the retail level, but also on the institutional prime brokerage level to an extent. If you trade through Goldman, JPM, MS, BOA/ML, etc. you can more or less expect to be front-run, the difference is that many money managers are willing to take that risk in order to get access to better margin. That's the catch.
For those that prefer privacy and anonymity, but can't afford a broker-neutral execution platform such as Bloomberg EMSX (Tradebook is a high-end agency broker offered by Bloomberg that apparently offers similar functionality), Reuters Trading, Fidessa, ITG, or Sungard that require 10-20 million AUM, there is always the semi-agency brokerage model. I believe that both Liquidnet and Instinet also have the same 10-20million AUM requirements.
Prime Brokers that utilize a semi-agency model and have limited proprietary trading operations are your best bet. That means Newedge, BNY Convergex and TD Bank. Although, I believe that they require 2-3 million aum for new accounts, it is possible to still obtain access to their services through an Introducing Broker.
So back to the retail-level, does anyone have any alternatives to the 3 retail brokers I mentioned?
