So - who's going to be the first to announce negative commissions?

T

terr

I see that for a $10K trade the brokers get maybe $2-$2.5 in order flow payments. I am not sure if this is for market orders only or for limit orders as well. Traditional order flow payments were for market orders only, but AFAIU it is done for limit orders nowadays as well.

So - if they don't mind cannibalizing their businesses completely, online brokerages can "race below the bottom" now. Ameritrade offers $0.2 payment per 10K order. E*Trade responds with $0.5. Schwab goes whole hog for $1. And so it goes...
 
Today being the first day of zero comiss at Ameritrade, they still charged me just under $2 per trade for clearing and exchange fees. So maybe eliminating those would be / could be the next step.
 
birdman said:
Today being the first day of zero comiss at Ameritrade, they still charged me just under $2 per trade for clearing and exchange fees. So maybe eliminating those would be / could be the next step.
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That's not up to the broker. That would be up to the exchange. So if the exchange charges no fees, then how will they ever stay in business, to pay for their cost of doing business? Hehe. What are we talking here...Medicare for traders? Good grief.

(But even Medicare is paid for by someone.)

Oooh! An exchange tax in everyone's paycheck stub! Whether you trade or not, you pay for the exchanges to do business! Like how even if you never claim Medicare benefits, you still pay into that system!
 
zdreg said:
please explain clearing fees, the numbers seem off, too high
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5000 shares at a time is why the cost was high. Yesterday's total cost was just under and sometimes just over $10 per trade, so today's cost at just under $2 is a pleasant improvement.
 
terr said:
NYSE exchange fees: https://www.nyse.com/publicdocs/nyse/markets/nyse/NYSE_Price_List.pdf

Clearing fees: as an example, IB passes through a clearing fee of $0.0002 (I think) per share for each order. So for 1000 shares it's 20 cents.

Exchange + clearing fees can add up. I guess the next step is for brokers announcing that they will eat the fees.
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"Today being the first day of zero comiss at Ameritrade, they still charged me just under $2 per trade for clearing and exchange fees. " quote from birdman

This suggests a trade of 10000 shares which is unlikely.
 
birdman said:
5000 shares at a time is why the cost was high. Yesterday's total cost was just under and sometimes just over $10 per trade, so today's cost at just under $2 is a pleasant improvement.
More...
Thanks
 
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