Free ECN trading

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Pumpanddump

When do you guys think the day will come when you can float orders to ECNs with no charge??? (free trading)
I am suprised it hasn't happened yet. When will someone take advantage of this? If traders all came together and used one or two order execution systems, you would think this would be doable. How would the business model look to absord the costs?
 
Why not?

If the costs could be absorbed through other means like advertising or another means, why would this not be something that could happen in the future.

The internet is free in many ways???????

Why not have an upfront fee with traders and use the money for costs. Although, this wouldn't be exactly free, it would pay overhead costs of the ECN and provide free transactions.

People can laugh but I see this as something that could be done if a plan was put together and a think tank group of traders was started just like the internet was.
 
How do they make money? Its like the commercial I saw that a guy stole a soda and told the cops he thought it was free. The cop said then how does the company make money? They guy answered by saying volume.

I understand what you’re saying but how do you encourage business without the rebates? You can trade free on ECN’s now if your adding and not taking away.
 
How do you consider it free when (and if) some retail guy places an order through e-trade and is charged $9.99 when his order goes through ARCA?????????
I understand what you are saying as well and I am just opening this up for s constructive exchange area. I appreaciate your comments.

I think this will happen some day in hte future and I have just opened this up to look at everyones opinions.
 
Quote from Pumpanddump:

When do you guys think the day will come when you can float orders to ECNs with no charge??? (free trading)
I am suprised it hasn't happened yet. When will someone take advantage of this? If traders all came together and used one or two order execution systems, you would think this would be doable. How would the business model look to absord the costs?
More...

This is already possible for higher volume traders. All you need is commission rates of 0.2 cps or lower, and pass through ECN rebates. A trader paying 0.15 cps and receiving a rebate of 0.2 cps for order executions is actually getting paid to trade (no net fees, actually seeing net credits). For that matter, this is the basis for most rebate traders, as well.

I know that rebate trading wasn't the point of the thread, but even for 'regular' high volume traders (with low commission rates), the execution of their limit orders is 'free' or better. More thoughts on this at http://www.elitetrader.com/vb/showthread.php?s=&postid=719669#post719669

-Eric
 
Quote from Pumpanddump:

How do you consider it free when (and if) some retail guy places an order through e-trade and is charged $9.99 when his order goes through ARCA?????????
I understand what you are saying as well and I am just opening this up for s constructive exchange area. I appreaciate your comments.

I think this will happen some day in hte future and I have just opened this up to look at everyones opinions.
More...


He is adding to Arca not taking away. The 9.99 is all ticket charge that the broker makes. Some firms get rebates from market makers for sending them volume. You are missing some key points and you’re a prop trader. Some guys pay 1/10 plus add to the ECN and flip shares for a small profit. You should talk to a big NAZ trader at your firm to explain it to you. The NYSE stocks don’t charge on ECN’s but they make money on order flow.
 
I know what you are saying but I am posting this question even on a more general basis. Including people who just trade at leisure and not just talking about traders and the game of trading and rates etc.

1% of the people trading out there in the world know what rebate trading is.

I am talking about the general overall status of the evolution of the electronic market and the breakdown of the specilaist system. What is next?? That is what I am looking at and trying to think ahead about.

I think a nearly free trade execution system is very possible if some serious brain power was brought together.
 
I know he is adding to ARCA. I am not posing this as a PROFESSIONAL TRADER question alone. 99% of the people that buy and sell stocks have no idea when prop traders use liquidity techniques to minimize costs. I am talking about more than just STRICT trading. I am talking about the entire market not JUST DAY TRADERS.
 
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