Rebate Trading
- Thread starter oddeolab
- Start date
Can you amplify at all on your specific strategy or what a typical trade looks like for you in terms of when you get in and get out? Do you find you are better off with super high liquid stocks that have tight spreads and large volume in terms of how long you are stuck holding a long or short position before it gets closed out?
I was checking out some preferred stocks because there is such a wide spread, might give more range of entry and exit point, but the price could move against you. Do you find it to be more peaceful than in trading a stock that does not move much at all vs. a more beta type equity?
I have always found rebate and scalp trading to be fascinating. To be completely and utterly flat on a daily basis would be so amazing. I kind of gave up on scalping/rebate trading years ago when super DOT came out and pretty much extinguished outside the spread fills. Now it appears that a large component of making this a success is comprised of speed, precision, and position management. Where 10+ years ago, it was a heck of allot easier. Would be really interested in hearing from you and other rebate traders for sure.
I was checking out some preferred stocks because there is such a wide spread, might give more range of entry and exit point, but the price could move against you. Do you find it to be more peaceful than in trading a stock that does not move much at all vs. a more beta type equity?
I have always found rebate and scalp trading to be fascinating. To be completely and utterly flat on a daily basis would be so amazing. I kind of gave up on scalping/rebate trading years ago when super DOT came out and pretty much extinguished outside the spread fills. Now it appears that a large component of making this a success is comprised of speed, precision, and position management. Where 10+ years ago, it was a heck of allot easier. Would be really interested in hearing from you and other rebate traders for sure.
No anyone can do it. Rebates will vary depending on where you route the order. As long as you step in offering shares (not taking out the bid) or bidding for shares (not taking out the ask) and get hit; that is all you have to do to earn the rebate.
Which brings up another point; say if you get net long by someone hitting your best bid. What is the margin that you need to then get out of that trade? i.e. a penny? Can you sell the position @ break even, and still make a net profit based on the rebate vs. commission?
What is the exit strategy or do you then try to turn around and offer the shares right back, hence getting another potential rebate, a round trip if you will. But if the spread is only a penny, how feasible is any of this? How much price movement do you really need or look for?
Funny, I had to look at my phone to check the date. Yup, January 2013.
Good luck "rebate trading". You're only a decade and pre HFT away from making money doing it.
delta, i find it best to trade stocks with high volume and a narrow spread you must use lmt orders and add liquidity so a wide spread could wipe out alot of gains in one move stops are a good idea ill post as i refine my methods as i hope others will. as for being a decade late... not sure but the ecn's are still paying for order flow and somebody has to collect so i guess ill be that someone for now!
my strategy as of now is basically an evolved version of my swing trades (where i was paying .0045 per share) i try to identify the trend and follow the flow of money ie buy oversold stocks and sell/short overbought i look at multiple timeframes and trade as appropriate the firm charges .0003 per share for "rebate traders"so if you are on the right side of the trade a small move is profitable and the rebates at the very least subsidize trading costs but if you are careful to always add liquidity you will make money sometimes you do have to take to avoid a loss from not getting filled tho other than that its just trading with cheap comissions and the added advantage of recieving money instead of paying
Do you favor a particular ECN? Awhile back when I looked at the rates NSDQ was something like .0023 for adding. NYSE was .0015 for adding and EDGX was .0026 for adding.