Best Broker For ETFs... $500K-$1MM Orders

Discussion in 'ETFs' started by gnome, Nov 1, 2008.

  1. I've always traded mutual funds and futures, never individual equities. But with the volatility of recent times, EOD fills on mutual funds risks too much slippage.

    So.... Which brokers would be better for larger orders? I know you get "messed around with" on large market orders, but if you want to get a position NOW, you can't put in a limit order and get much of it filled, right? Or is there some procedure which helps getting a big order filled?

    Obviously somebody like Scott or Ameritrade would be good on a flat commission basis, but what about slippage? It does no good to save $100 in commission if you lose $2000 in slippage...

  2. AAA30


    500- 1mm orders will not have a real impact on the liquid ETF's and should not be to much of a problem for Scot trade or Ameritrade to fill even on a Limit order basis. But I have never used them so I can not give information on the slippage/front running that may occur on market orders.
  3. Well yes, I expect any broker can fill the trade in a liquid issue... but what about WHERE they fill it? Routing? Time delays trying to fill in one place which might be be the best price?.. and that kind of thing.
  4. Mark2m


    I have stopped trading most equities, futures, and options, since September. Presently trading ETF's via IB. Reasons is the elimination of Trade date + 3 day's for final settlement. Therefore I am trading in excess of $300K per day with $100K per account.

    The following are the particular problems with ETF trading.
    1) Early AM. trades have wide Bid/Ask, need to watch carefully and either limit trades or wait till the spread is more advantageous.
    2) Early AM, a good % has moved due to the futures and the inability of getting in the cue till after a reasonable period of time.
    3) Although some of the ETF have moved by large %, due to overnight trading overseas, I have found that it is still advantageous to trade Ultra shorts (for 4-12% gains per day), due to the nature and price of the ETF, I am glued to the screens as I would futures, and mainly scalp.
    4) the toughest part of my trading due to the volatility is to determine whether to go long or short for the 3 minute chart period that I enter the market.
    My screen typically will have Indu, Nasd, SP, + futures of each and SH & SDS vs SSO, EEM vs EEV, FXI vs FXP, DXD vs DDM, I also trade gold, although that is another paragraph devoted to brain damage.
  5. I'm not a scalper. (Frankly, I don't know how you guys do that..) I'd be hoping to play for a swing of 5-15%, if successful.

    I don't know what would typically be called "wide" between bid and ask... but whatever it is, it pales compared to EOD fills with mutual funds.

    So more specifically... are there brokers where a good one would fill an order for let's say 10,000 OIH... filled in a few seconds over a few cents in prices... or a bad one which would take 5 minutes, trying to rout it here and there where he gets the most remuneration, but I get filled over a range of 40 cents?
  6. AAA30


    Ok, the best question I can ask you then would be how do you expect or plan to place your orders. Market or limit, on the open or on the close. Are you moving from rydex to ETFs? Do you want to execute your orders yourself or hand it off to some one to take care of and not worry about it? And is this just to protect yourself if there is a exteme intraday movement and you want to exit before the close? Are you still managing OPM or is this for yourself?
  7. Any stocks broker will do.
    Just check that they are registered with the SEC (FINRA Brokercheck), and are SIPC members.
    Slippage depends on market conditions.

    You aren't attempting to daytrade with $1 Million, right?
  8. AAA30


    Ok you need to go with a direct access broker. So there is no delay in orderplacement and execution. Paying .005 a share or 7.95 a trade should not matter at all. If you use IB you will also get access to algos that you can use to execute your trades and the abillity to use other order types to hide your orders or only show a small quantity of it. You will get slippage, some times substantial, on OIH on a 10K share market order and the only way to minimize this would be with tape reading skills to pick your spots. Again commisions will not mater execution is more important.
  9. AAA30


    Don't assume that he does not know what he is doing or that he would put his funds into a bucket shop. He has been around longer , and probably is more know more, then you.
  10. Yes, that's true. I've been an NASD principle in a prior life, but I've still never traded stocks... and I am ignorant of the mechanical specifics and things to avoid.
    #10     Nov 1, 2008