Ranking of brokers offering price improvement

[Fain]

In my experience, The common approach used by big brokers to calculate the price improvement is the difference between the filled price and the bid price for sell order, the difference between the filled price and the ask price for buy order. They don’t compare against NBBO, Fidelity specifically lists the price improvement they give you.

Your making it more complicated than it should be. It's price improvement over the best available quoted bid or ask price in the Markets.

BID $9.90
ASK $10.00

if Execution occurred at $9.95 for a buy order then price improvement would be $0.05 per share.

 

[freeman311122]

Your making it more complicated than it should be. It's price improvement over the best available quoted bid or ask price in the Markets.

BID $9.90
ASK $10.00

if Execution occurred at $9.95 for a buy order then price improvement would be $0.05 per share.

I was describing the price improvement of both buy order and sell order while you gave an example of buy order. “Over” or “under” for different type of orders.

 

[JSOP]

I was describing the price improvement of both buy order and sell order while you gave an example of buy order. “Over” or “under” for different type of orders.

ok but what @Fain is describing would be the same for sell orders though.

 

[freeman311122]

ok but what @Fain is describing would be the same for sell orders though.

I avoided using the word of “over” otherwise i don’t think it is accurate because it is not always the case of “over”, for buy order, the filled price is compared against the ask price to calculate price improvement, the filled price is less than the ask price, so it is not “over” the ask price, right? I didn’t want to cause confusion, that is why I used different wording, that is all.

 

[murray t turtle]

Scalping or not, as a trader, you can always benefit from the price improvement offered by various brokers. In my experience,

#1 is Fidelity, mostly the price improvement is better than 50% of the spread, it is amazing how Fidelity is able to deliver such great price improvement, exactly like they claim, it might because they don’t sell order workflow, I don’t know if they run their own HFT, but obviously they give more of their profits to customers.

#2 Charles Schwab

#3 TD Ameritrade

#4 E*TRADE

What is your experience with various brokers? Please share, thank you very much for your time!

%%
Looks about right/Fidelity + SCHW @top/ Etrade @ bottom, again. Fidelity seems to have finally dropped most all its extra fees, but cryptic /secret about the interest it pays/LOL

 

[Fain]

I was describing the price improvement of both buy order and sell order while you gave an example of buy order. “Over” or “under” for different type of orders.

I feel like we're speaking a different language.

 

[freeman311122]

I feel like we're speaking a different language.

I feel like we're speaking a different language.

That is not really my concern, I was asking about everyone’s experience on the price improvement, especially those small brokers such as TradeStation, TradeZero, Thank you very much for commenting. I appreciate that!

 

[zdreg]

As an alternative to Price improvement maybe consider a platform with fast order entry, fast execution, choice of routes were some give rebates. E.g. Buy 5000 XYZ, sent to ARCA, add liquidity by Buying on the bid. We charge $4.50/trade, ARCA rebates $10 for a net $5.50 credit to you.

Choice of routes is for HFT traders not for the average day trader. Furthermore in your commission structure you did not mention that taking liquidity results in charges to the trader.

 

[Robert Morse]

Choice of routes are what all our Lightspeed and Sterling users have access to and take advantage of on a Daily basis. And I was providing one example. We list those fees on our website. I would say most that trade momentum, fast-moving stocks are willing to pay ECN fees to get in and out really fast and have access from 4am to 8pm.

 

[zdreg]

Choice of routes are what all our Lightspeed and Sterling users have access to and take advantage of on a Daily basis. And I was providing one example. We list those fees on our website. I would say most that trade momentum, fast-moving stocks are willing to pay ECN fees to get in and out really fast and have access from 4am to 8pm.

There is a psychological disadvantage to average day traders when paying commissions. The thought of paying commissions affects their trading decisions in a negative way, particularly when trading numerous small lots. Ticket charges are a large expense for the average day traders.

Your one example of 5000 shares is a large number for even low priced stocks because these volatile stocks have large percentage moves. Whipsaws are fairly common forcing traders out of their positions. Risk management is not exactly the expertise of avg, day traders. Raising the number of shares traded to spread the commission over a larger number of shares is not a smart move from a risk management point of view.