The Hidden Costs of No-Fee Trading

[newwurldmn]

Interactive Brokers. Their API is great. TWS is a bit frustrating but I hardly use it.

they don’t do pfof. How were you able to study the execution.

 

[FreeGoldRush]

I get great fills on my stock trades with TDA, so I prefer the free trades.

How do you know? lol

 

[FreeGoldRush]

they don’t do pfof. How were you able to study the execution.

I'm not going to write an academic paper here with all the details but the high level version is that I wrote software to send orders at identical times to both IB and TD and compare total costs. Sometimes TD was over $100 higher cost when spending just $5,000. These were trades for volatile equities with high trade volume at the time. You obviously won't see such big discrepancies when trading something like SPY.

To do this right you need a trade size that is taking more than the lit liquidity at NBBO. Citadel and other PFOF firms basically get you because the SEC allows them to trade with you based on displayed bids/offers yet there is tons of dark liquidity at NASDAQ and the other large exchanges.

 

[murray t turtle]

Hidden Cost of Free Trading? $34 Billion a Year, Study Says

https://finance.yahoo.com/news/hidden-price-no-fee-trading-160021808.html

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Good read but the headline photo conflicts with the news article ,so they should clean up those conflicts. All those fees are disclosed in any public broker.
NO body works for nothing\ even ''non profits.'' Charity work maybe an exception.
Maybe their lawyers advised against it; i wish they would have put some names on the 2 or 5 brokers.

 

[KCalhoun]

I get great fills with fidelity, within .01 for virtually everything, for trades up to 500 shares, with no commish..... huge savings (I'd spent 33k on commishes in the 18 months prior to zero-commish pricing)

 

[JackMorgan]

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.

the biggest cost is

the cost of

being

w
r
o
n
g



try being right , it helps. see my posts for guidance

 

[newwurldmn]

I'm not going to write an academic paper here with all the details but the high level version is that I wrote software to send orders at identical times to both IB and TD and compare total costs. Sometimes TD was over $100 higher cost when spending just $5,000. These were trades for volatile equities with high trade volume at the time. You obviously won't see such big discrepancies when trading something like SPY.

To do this right you need a trade size that is taking more than the lit liquidity at NBBO. Citadel and other PFOF firms basically get you because the SEC allows them to trade with you based on displayed bids/offers yet there is tons of dark liquidity at NASDAQ and the other large exchanges.

thank you for the explanation.

 

[murray t turtle]

the biggest cost is

the cost of

being

w
r
o
n
g
try being right , it helps. see my posts for guidance

%%
THERE is more than a few market makers;
G1 Execution,
GS,
MS,
Citadel,
VIRT,
JPM,
Apex
2sigma,
+ Wolverine [+ BAC] is on some lists dont know why that list excluded them , maybe not as much business?? I dont even know the % Citadel has.
I'm looking @ bigger trends + not order intent\cancels.
Sure, as you noted , any market with fewer dealers or lower volume = wilder.

 

[JackMorgan]

Gene Wilder ?

 

[JackMorgan]

I get great fills with fidelity, within .01 for virtually everything, for trades up to 500 shares, with no commish..... huge savings (I'd spent 33k on commishes in the 18 months prior to zero-commish pricing)

who doesnt have great fills these days ?