Why I did not get any rebates

[qlai]

This makes zero sense to me. If I owned an exchange I'd want as much traffic, as you put it, as possible.

Exchanges have to pay for network bandwidth as well, so it makes sense that they offload some of the cost. Each access port supports limited amount of messages per second and if you exceed that, you need to purchase additional port.

http://nasdaqtrader.com/Trader.aspx?id=PriceListTrading2#connectivityoep

 

[qlai]

I think this might explain this rebate issue if it is true.

Which exchange did you use?

 

[Dna7272]

Which exchange did you use?

Nasdaq

 

[qlai]

https://www.interactivebrokers.com/en/index.php?f=936&nhf=T

 

[Dna7272]

https://www.interactivebrokers.com/en/index.php?f=936&nhf=T

View attachment 266850

Now we are heading the right way, thank you. It explains why I did not get rebates. But does not explain why I paid fees. Probably there is an explanation for this also

I was always wondering why some people don't hide their real order size even when they are huge. Now I have the answer.

 

[qlai]

I was always wondering why some people don't hide their real order size even when they are huge.

They can use Smart Routers to split large order across exchanges and price levels.

 

[JSOP]

This makes no sense. DNA's order was a limit order at the bid. It could be hit by the Ask dropping or a Mkt sell order large enough to exhaust the queue down to DNA's resting buy order. "Liquidity-removing" and "Liquidity Taking" are the same thing. (Or am I wrong? But this is the way I see it.)

When I said "liquidity-removing", I meant "liquidity-adding" in my post. Just replace all instances of "liquidity-removing" to "liquidity-adding" and everything would make more sense. Apologize for the confusion.

 

[piezoe]

When I said "liquidity-removing", I meant "liquidity-adding" in my post. Just replace all instances of "liquidity-removing" to "liquidity-adding" and everything would make more sense. Apologize for the confusion.

OK. Thanks. I thought later that must be what you meant.

 

[JSOP]

This makes zero sense to me. If I owned an exchange I'd want as much traffic, as you put it, as possible. Many brokers hold limit orders away from the inside bid and ask on their servers, but it must be for another reason. Do some exchanges charge for order cancellation? -- which is a type of liquidity removal. Or, do Brokers that internalize orders benefit from holding orders on their servers until they are executable? There really is no such thing as Direct Access anymore for retail traders ever since the SEC required all brokers to screen orders before sending them to the exchanges. I would think that what we call Direct Access nowadays is not having your order held on your Broker's server until it's executable.

It didn't make sense to me either. Why would exchanges refuse to accept orders when it adds to their liquidity? I don't believe or agree with exchanges charging for canceling orders either. There are measures that are there to discourage spoofing and layering but every trader is entitled to cancel orders at any time when it no longer serves its trading purpose or due to innocent mistakes. It is outrageous that every single trader is forbidden to cancel orders that it sent to the market.

And with regards to brokers internalizing orders, they shouldn't be allowed to do so. This causes direct conflict of interest against their clients by trading against them despite disclosures. To me, brokers are obligated to send client orders to be executed on exchanges at all times. I agree with you that it is shameful how stock and option brokerages have now become unscrupulous forex brokers too even with the existence of central exchanges.

 

[JSOP]

I agree with your write up above(about delaying the orders). The reason broker may hold your order is because they have to pay the exchange proportionally to amount of traffic used. So if client sends limit order far away from the market and then cancels it, that is a waste of resources that can be avoided most of the time without adversely impacting the client. Also, it’s possible that the broker did send the order to exchange and it did provide liquidity but due to some bug it was not accredited correctly(the liquidity flags are a mess)

As far as IB, they provide lots of value add and are not really catering to DMA client. After fruitless discussions I just decided that the benefits overweight the restrictions for my trading at current time.

Keep in mind that brokers are middlemen and the margins are thin, so I wouldn’t say their intention is to screw the client.

I don't buy their excuses especially that the orders that I sent to the exchanges were never extremely far from the NBBO; they were always just at most 10's and 20's of cents away from the NBBO. There is no reason for them to hold my orders on their servers unless the exchanges are closed even if my order price is extremely far away from the NBBO. And honestly an order that is close to the NBBO has just as much chance of getting canceled by the sender as a one that's far away from the NBBO. It's ridiculous that the broker now wants to play psychologist to decide how likely a trader is to cancel his orders based on the order's price. LOL And it's even more interesting that this "bug" never works the other way of mistaking a liquidity-removing order to be liquidity-adding and gives the trader the rebates for a market order when it's supposed to charge the trader. I mean if this "liquidity flag is a mess" then it should be a "mess" for both ways, don't you think? And yet it's always flagging liquidity-adding orders to be liquidity-removing...

So yeah like I said before brokers are just screwing us to make more money, even if it's not their intention but that's what they are doing. The margin is thin so they are trying to make it thick or at least thicker. LOL