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NYSE and NYSE Arca Announce Changes in Equities Transaction Pricing, Effective March
- Thread starter seasideheights
- Start date
This is virtually meaningless...
They are talking amounts on the order of 1/10 of one cent.
If you are doing ultra-high volume AUTOMATED algo trading...
$0.001 may make a difference...
But any core, HUMAN managed trading operation...
Must have profit margins in the $0.01 to $0.02 per share range...
So < 10% of that just does not matter...
In terms of routing decisions or your business model's viability.
It's not even worth thinking about for me.
They are talking amounts on the order of 1/10 of one cent.
If you are doing ultra-high volume AUTOMATED algo trading...
$0.001 may make a difference...
But any core, HUMAN managed trading operation...
Must have profit margins in the $0.01 to $0.02 per share range...
So < 10% of that just does not matter...
In terms of routing decisions or your business model's viability.
It's not even worth thinking about for me.
Quote from DeeDeeTwo:
This is virtually meaningless...
They are talking amounts on the order of 1/10 of one cent.
Even if you are a trader only trading 1 million shares a month, 1/10th adds an extra $1,000 on to your monthly costs. And if you trade several million shares a month like a lot of traders do your monthly costs just went up several thousand dollars. 1/10th is not meaningless. There are plenty of black boxes that have an expectancy of less than 1/10th of a penny profit margin.
Quote from tomu:
Even if you are a trader only trading 1 million shares a month, 1/10th adds an extra $1,000 on to your monthly costs. And if you trade several million shares a month like a lot of traders do your monthly costs just went up several thousand dollars. 1/10th is not meaningless. There are plenty of black boxes that have an expectancy of less than 1/10th of a penny profit margin.
That's EXACTLY what I said...
This would only matter to black boxes.
Last year I traded 37,000,000 shares...
And netted slightly > $1 million...
(The record volatility more than doubled my normal margins)...
So if I got an extra 1/10 of a cent/share...
That's only $37,000...
Not enough to change a single decision I made in 2008.
Someday when I'm doing 370,000,000 shares/year AUTOMATED...
I may start to care about 1/10 cent rebates.
But the main point I'm trying to make...
Is that if you are trading manually and your margins are $0.002 or $0.003/share...
You very likely do not have a viable long term business model.
And black boxes are a great ADJUNCT to a traditional scalping operation...
But are very borderline as a standalone business model.
If it is such a small difference than why institute a change. They get greedy and perceive this small change (in their eyes) won't change trader habits. They will lose volume and reduce their revenue over time. By the time they figured out their mistake traders will have migratated and be content and comfortable using cheaper providers. Ecn's are the same essentially, it is a like commodity and the lower price grabs market share.Traders will increase their use of lower cost ecns like Edge.