In general. If you provide liquidity i.e. your order does not match with any other reverse order immediately then you are supposed to get some rebates. But if it does immediately then you pay some fees. Fees usually higher than rebates
Why I did not get any rebates
- Thread starter Dna7272
- Start date
How is the fee charged on the tax form? It is considered a cost? How is the rebate considered? A capital gain?
Seriously, I have not heard about this, because I do not trade stocks. I have a portfolio, but do not "trade it", heh. I have heard of PFOF. Is the fee/rebate thing a part of that?
I mean, why the HELL would I get paid extra for selling stocks at the bid?
Why should I get charged fees for buying stocks at the ask? Whatever. Maybe I should START smoking something, like zdreg intimated.
Fees are costs and rebates are gains. As far as i know the main reason that they pay rebates is thst ECNs compete for liquidity. More liquidity attract traders, traders pay fees - ECNs happy. Profit
So the IRS gets you coming and going. That is outrageous. The ECNs should be the ones getting those dings, not the traders.
Before moving to my current broker i used to trade with IBKR. There everything was smooth, most cases i got good rebates. After i moved to my current broker i noticed that the rebates were not as good. With my new broker i noticed that i am getting alot less rebates even when i am deliberately sitting on bid for buy orders. But today was a special day, i bought several stocks on bid, and for all of them I paid as if i was taking liquidity. According to logs all my orders were executed at the initially chosen exchange.
I just wanna know how that happened. So i could avoid doing it the next time.
But apparently I cannot get answers here. I actually contacted my broker again with more detailed data but haven't got a proper answer yet. I will contact them on Monday, maybe i will be able to figure out what's going on.
I don’t think so. If his order was actually on exchange’s book, it should have become part of the protected NBBO. I can’t think of any case where resting limit order takes liquidity unless it has some special instructions like peg. Definitely sounds fishy. Are you sure your order was actually on exchange’s book? Was there a sharp move in the stock when you got filled?
You can ask your broker to provide you with exchange order id, the one that the exchange uses as unique identifier. Then you can contact the exchange help desk and ask what happened. If your broker refuses to provide that and refuses to refund the fees, you should post the name here so we can all avoid it.
No, there were no sharp moves, quite the opposite. For example with ALRN i had to wait for about 8 minutes before my buy order that sit on the bid price got filled. The trade log says it was accepted at the exchange right after i placed the order.
Thanks for your input. I am not sure if I am willing to go that far. I will monitor rebates behavior for a few days, if this issue is going repeat itself i will try to dig deeper