Are the big firms "stealing" ECN rebates?

Discussion in 'Trading' started by giggollo, Sep 5, 2006.

  1. Not accusing anyone of anything (yet!) and maybe I'm way off, but there seems to be 2 tiers of NASDAQ add-liquidity rebates based on how much daily volume a firm does:

    >30 million shares : rebate = $0.0025
    <= 30 million shares: rebate = $0.0020

    Most of us are familiar with the $0.002 rebate, but are big prop and retail firms (Genesis, Bright, IB etc) actually receiving rebates of $0.0025 per share from NASDAQ because of the huge volume they're doing, and only passing on $0.002 to their customers? If so, why don't they pass it to their customers?
  2. if those firms are receiving the extra credit....why should they pass on those savings if they dont want to. Seems to me that the "firm" is doing the higher volume required not the individual customers so in their eyes it probably seems like they deserve the extra rebate....not their clientelle......i am sure if one of the big firms did this most of the others would follow suit to stay competitive......but if none of them do it......seems like a good way to make some extra money for themselves to me
  3. ok, that makes sense...i guess i can think of it as more like a kickback to the firm like you said for doing more volume, would still be nice to know for sure that big firms are actually collecting it, just out of curiosity
  4. yes they do collect it....i know swifttrade receives tha rebate every month.....and does pass the profit on to their traders
  5. i also see nothing wrong with this. if you're doing more than 30 million shares a month, then maybe you could ask to split it or start your own firm.
  6. no firm i've seen passes the extra on? now with brut gone the .0022 and .0027 gig is over with


    Arent there other ECNs that offer .0022 (rebate)/ .0027 (to take)?
  8. We pass on what we receive. But, we don't do a lot of volume on Nasdaq anyway.

  9. If the firm does that much volume, I don't see why they shouldn't keep it. Its their firm wide volume, not your individual volume that gets them to those numbers. We are all looking for good commission deals, but the commission rates have gone down alot in recent years. Cut them some slack these firms need to make a profit too.
  10. Interesting, thanks to all who we know of 2 firms so far that actually pass the extra rebate to their customers (Swift and Bright) which is great..i agree that its ok for a firm to keep it, but the firm that passes it to its customers distinguishes itself (albeit in a small way) and adds a little more value to its customers...

    I wonder which other firms are collecting it and passing it to customers, and also, what makes a firm like Bright or Swift pass it to their customers, when they know they could just put it in their pockets (Perhaps in Bright's case, their NASDAQ volume is too small to even bother)
    #10     Sep 7, 2006