question from equities noob

[vox_lucidus]

my background is entrley in fx........i have a question regarding equities mkts......what are credits/rebates, and how do they work????

 

[Ebo]

Rebate traders are paid for "adding liquidity" to an ECN.
If you get hit on the bid or taken on your offer you get paid a small percentage. If you take liquidity from certain ECNs you pay a commission. Some brokers pass on these fees/rebates to the customer while some do not! In my opinion, this is perhaps the slimiest way to make a living, but some guys still do it.

 

[vox_lucidus]

Quote from Ebo:

Rebate traders are paid for "adding liquidity" to an ECN.
If you get hit on the bid or taken on your offer you get paid a small percentage. If you take liquidity from certain ECNs you pay a commission. Some brokers pass on these fees/rebates to the customer while some do not! In my opinion, this is perhaps the slimiest way to make a living, but some guys still do it.

pardon my ignorance please
if u make a bid or offer on your shares and someone hits them u get the percentage?????
how much is the percentage typically?
why is it slimey.....????
if i understand correctly.....this is what i would functionally equate with placing an entry order and getting filled....would u say this is an accurate comparison....???

 

[Ebo]

Here is an example of Instinet's Rebate schedule.

Rebate per executed share of $.0020 for trades that add liquidity to the INET book.

Charge per executed share of $.0030 for trades that remove liquidity from the INET book.

 

[vox_lucidus]

do most prop shops pass that on to you???

 

[Ebo]

Some do, but not all.