does hidden order that provides liquidity receives rebates from exchange?
- Thread starter trend2009
- Start date
Robert Morse
Sponsor
Not only do we not provide rebates for any order not visible, but it is also possible to get back a take liquidity fix tag and have to pay.
It should, but less than displayed one. I'm not sure why Robert said it may actually take liquidity, maybe if, by the time it arrives, the market moved and the order is aggressive.
https://www.nasdaqtrader.com/Trader.aspx?id=PriceListTrading2
You don't get a rebate on hidden orders yet you pay rebates on hidden orders you lift. Seems very unfair. Most of the experienced traders I know have opened at least one zero commission broker account to limit commission costs.
For those who say nothing is really free I would ask what level of service was lost when commissions for day traders went from around $25 per thousand shares years ago to around $5 per thousand shares before the final move to zero by some brokers? The brokerage business is not a very labor intensive business and very susceptible to technology taking over traditional jobs provided by humans. The move to zero commissions was inevitable.
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Robert Morse
Sponsor
And yet we are taking more calls than ever from customers of online brokers that are unhappy with execution speed, quality, lack of choice of routing like no dark pools or hidden orders. And phone hold times at those brokers has increased. We provide a variety of solutions for small and medium-sized Hedge Funds, Trading Groups, and Active Traders. Our support staff answers the phone when you call and you can choose a personal salesperson like me. They find value in our offering. And, our options commissions are typically very low.
Then your firm should be around a long time. The goal of traders (not speculators) is to achieve negative transactions costs. This is what pays the bills for most of Wall Street. The better retail traders come to achieving the goal the more profitable they are likely to be. Zero commissions just move them closer to that goal.
I think you're missing the point. With zero commissions, the order flow is sold so on average you'd definitely get worse fills. Bottom line is you're paying through fills, not through commissions and for me, slippage is a much bigger cost.
It doesn't get sold if you get hit on the bid, does it? The fills are fine if you are playing tight spread stocks or are making the spread. Slippage isn't a problem in a penny spread heavily bid and offered market. The proof is in the p&l. Experienced traders I know are moving more and more of their trading to the zero commission brokers. They aren't doing it because it is costing them money.
Robert Morse
Sponsor
If you choose our per trade rate and offer liquidity on NASDAQ, ARCA or EDGX, and enter larger orders, you can get paid to trade with us. E.G. Buy 5000 XYZ on ARCA, add liquidity, cost of $4.50, then you get a $10 rebate for a net credit of $5.50. 2250 shares would be zero net commissions if you add. (Not including reg fees). One other comment. You said, "The goal of traders (not speculators) is to achieve negative transaction costs." I thought the goal of traders was to make money. Get in and out of positions with speed, efficiency and as little market impact as possible.
Sure, in certain circumstances it can be justified but when the price is moving away, you'll still get taken. It's another aspect to focus on and can distort from the bigger picture.