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The Hidden Costs of No-Fee Trading
- Thread starter 777
- Start date
Summary
Overall, there is no evidence that PFOF harms price execution.
In the end, we find that our price differences are due to
different brokers getting different execution prices for the exact same trade at the same venue.
Indeed, wholesalers, unlike exchanges, are not required to treat clients equally.
Overall, there is no evidence that PFOF harms price execution.
In the end, we find that our price differences are due to
different brokers getting different execution prices for the exact same trade at the same venue.
Indeed, wholesalers, unlike exchanges, are not required to treat clients equally.
i never thought pfof itself harms execution.
however, the mere fact that order flow is routed to only a few dealers, can easily affect the price of the stock at any given time , as they move the b/a around to advantage themselves
is this ever even discussed ?
however, the mere fact that order flow is routed to only a few dealers, can easily affect the price of the stock at any given time , as they move the b/a around to advantage themselves
is this ever even discussed ?
the question is, “is it cheaper than paying commissions when your order flow would be sold anyway?”
Not in my case and I tested it thoroughly. There might be one exception. If you are buying/selling stocks over $1 that have a 1 penny spread and you are buying/selling only 100 shares at a time then it should be difficult for the PFOF guys to take advantage of you. But this isn't a typical case for most of us.
Interactive Brokers. Their API is great. TWS is a bit frustrating but I hardly use it.
The actual trading cost-per-trade is the sum of commission, exchange fees, spread, and slippage. Some "costs" get disguised among those. "Everybody along the way" needs to "get paid" to stay in business... and they all do. So... costs can overwhelm attempts at scalping... should playing for bigger moves.
Plus exchange fees, SEC fees, etc. I'm well aware of all the costs as I've been paying them! lol. And I took every bit of that into account in my testing.