Direct Access Brokers that will not sell your Order Flow to HFT

Quote from Mike805:

In my experience, people are quick to take issue with something based on "gut feel" and a lack of information. Some aspects of PFOF and internalization "feel" wrong. In this case, you might be missing some information...

If that's the case, I urge you to pick up a series 7 manual and skim through the section on exchanges and broker-dealers. Its been too long and I don't remember most of it, but, the fact is there are significant rules in place that, no matter what, if followed, will *always benefit the customer*. Always.

Now, whether or not the rules are being bent in favor of certain HFT firms, I don't know... Winston knows what he's atalking about here way more than I do. But, internalization and PFOF are very strictly regulated and I would speculate that no firm would ever intentionally break the rules since the consequences would essentially be lethal if word got out. If you have examples please post them.
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PFOF has always been a controversial issue, but it is technically legal, even if it is subject to abuse.

If you take a look at Winston's posts on the thread I linked to earlier, he was arguing about how retail traders were getting their orders skimmed through such practices.

The point is that not everything is done by the book, and even then certain rules can be subject to creative interpretation. That is why firms hire securities lawyers.

This is more than a simple matter of brokering, there is also an angle of securities law. A manager wouldn't consult a broker to discuss legal issues, he would hire a lawyer.
 
Quote from MRBRETTONWOODS:If you take a look at Winston's posts on the thread I linked to earlier, he was arguing about how retail traders were getting their orders skimmed through such practices.
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If you take a look at the dates & times of my posts, or if you actually read the threads I was posting in you would realize that I was not commenting on paying for order flow - more ripping on internalization during the days of flash orders. Now that flash trading is banned and over with I don't see nearly as much of a problem with outsourcing your order flow (even if you do get paid to send it somewhere). Clearly YOU didn't take a look at my posts or the thread you quoted from.


It's time to give it up on this subject. If I'm wrong and you have designed matching engines or have paid for order flow in the past please speak up...
 
Quote from WinstonTJ:

If you take a look at the dates & times of my posts, or if you actually read the threads I was posting in you would realize that I was not commenting on paying for order flow - more ripping on internalization during the days of flash orders. Now that flash trading is banned and over with I don't see nearly as much of a problem with outsourcing your order flow (even if you do get paid to send it somewhere). Clearly YOU didn't take a look at my posts or the thread you quoted from.


It's time to give it up on this subject. If I'm wrong and you have designed matching engines or have paid for order flow in the past please speak up...
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Forget about flash orders and other forms of HFT. You were explicitly chastising 'hft internalizers'. That is the topic of discussion. Don't bring HFT in general into this discussion. That is a diversion. Stop trying to find avenues of escape from your established blatant hypocrisy.
 
Quote from JuniorCTA:

The thread title is oxymornic.

Direct access trading is void of broker realationships.
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I explained the title in an earlier post. Many retail brokers advertise themselves as offering 'real-time' trading, but often that is not the case.

Also, the cost structure at the retail level is not incentivized towards direct-access trading.
 
Retail traders shouldnt put up a huge stink as long as their orders get filled in a timely fashion, and that they have the option of 'direct-to-exchange' routing for a premium. The front-running problem which has many traders spooked sounds like its an institutional problem and not for retail individuals to worry about.

Bottom line;
If your fills are quick and timely with good rates, as a retail trader, what more do you have to worry about? Fug it. Get money.

Don't like it? Go trade futures or forex (and obsess over pip spreads) equities aren't the only game in town and looking ahead forward it might be a bad idea with major changes to the ECN systems possibly looming around the corner to regulate the institutional fear of HFT and any future flash crash type events.
 
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