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. Correct/wrong? 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. thanks! -gariki
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. Don