We'll use Schwab as an example here. Say I buy 100 shares of XYZ @ $50.00 a share. I put in the price for $50. Bid/ask $49.97/$50.02 Did Schwab (internally) have a seller at $50.00 at the time to become the MM? Did Schwab own that 100 shares and just sold it to me?? How quickly did my offer go from Schwab's preferred MM then to other MMs? In less than a second, if there is no match, will it go to other MM's out there?? Still trying to figure out when the order spreads to other MMs. In options would it be the same way?? And just a quickly? I think Schwab and Fidelity give me pat answers, but not the full story. Thanks for any solid info...
My retail broker was the market maker and order flows...
- Thread starter Cabin111
- Start date
You realize people do PhDs on this topic right. I suggest going to study for the Series 57 , and then read books on trading and exchanges, Also suggest reading about regulation NMS and understanding what is known as internalization. https://www.investopedia.com/terms/i/internalization.asp . Ask Schwab if they accept payment for order flow, and their routing policies
I think it would be best if you read some good books on trading that will help you clear your doubts. What you are asking is not something that anyone can answer. I think that it depends on how much you practice trading and how well you learn to trade using brokers. Be it Charles Schwab, TurnkeyForex, Interactive Brokers, or any other broker, none of them will tell you the whole story. So, it’s better to make wise decisions while trading. Like with my previous broker one of my biggest instances of loss was when I wanted to short the EUR/USD 5 pips before the trigger point in order to sell a large volume, the order was canceled before that level was reached and I was stuck in trade going opposite of what I was anticipating. Suffered a massive loss and immediately switched my broker. Now I am with Turnkey Forex and I find them more favourable and responsive to my trading needs. So although Forex is unpredictable and you will never be able to totally comprehend the market, still knowledge of the markets and offerings of your broker can help you a great deal.