Adding liquidity question..

Discussion in 'Prop Firms' started by kcgoogler, Jul 31, 2011.

  1. So here is what my understanding is about adding liquidity.

    Say SPY is trading at 100.00-100.01 (Bid-Ask); i put in a limit order to buy/cover 100 shares at 100.00 or sell/short at 100.01 - in both cases my order sits on the order book until someone takes it out. So i am adding liquidity.


    So if my commisions were say 0.004/sh and i trade only limit orders as above, and i route it to say NASDAQ with a 0.002 rebate/share; my effective commisions are 0.002/sh.

  2. rmorse

    rmorse Sponsor

    Correct....As long as your broker is allowing you DMA and offering you the rebates.
  3. You're correct, and we can also get paid for "taking liquidity" by using our smart order router or picking the proper destination, like PHX or CBSX etc.