Getting paid to provide liquidity

B

Babak

I've known about MarketX's policy to provide money to those that put a limit order in their book (that is later executed). Apparently they pay up to $10/transaction. If your limit order is for 1000 shares and the other side is a large institution or brokerage then you get paid 1c/share.

Theoretically this should have vaulted MarketX to a higher ranking on the ECN list. I don't think it has made much of a difference.

Is this rebate limited to those trades entered through Tradescape/Momentum Securities (the owners of MarketX) or can any broker (IB or MB) get in on the deal?

If you have experience with this, your comments would be appreciated. Thanks.
 
How can they afford to pay you to trade with them

They are desperate to gain liquidity in their book. Of all my various fills, whenever I use a "smart" ECN type of routing, I've never once been filled from their book. They just don't have any liquidity.
 
I think MarketX will go the way of the Attain ECN(anyone remember them?). With the advent of supersoes, there really isn't any need for these smaller ecns.
 
When I was with Tradescape I used MarketX a lot . Isld might have 10k shares on the bid or ask so if I went there I would have to get in line. I could post an identical bid and be first on Market X and the whole world would see it. Small advantage but thats what trading is all about.:)
 
I trade through tradescape.com and have found MKXT to be very useful. You still can't beat ISLD for liquidity but MKXT is a pretty useful option when it comes to order placement. One of the best things about MKXT is not the cheap tixs, but you can submit and cxl orders just like ISLD, instant cxl so you don't get stuck out there with the likes of INCA, REDI, BTRD, etc etc. MKXT was awesome during the surprise rate cut in January, almost every ecn was blown out but I was able to get out of all my longs thourgh mkxt. Please don't compare it to ATTN, it's like apples and oranges. Check out the MKXT book on the site and you will see that there's a lot of shares out there being used by xt.

Good trading all,


Murphy:)
 
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