My hat is off to you. I have never heard that one before. I guess I can add another one-liner (or, is that, two-liner) to my repertoire?
Do you mark up commissions and get overrides on your traders? The fact is that there are tons who get great deals because they dont have a middleman marking their rates up on them. In particular, those of us who trade remote and dont need anything or anyone to hold our hands would be getting ripped off paying anything more than .005 base..... And the bottom line is that .0035 IS the going rate. Those who dont believe it can stay on the sidelines
Bottom line you don't want to admit the rate is available. Some traders have PM'd me and I put them in contact with the person that can hook them up FOR .0035 per share. YOU SAY IT CAN'T BE DONE.. WELL IT'S BEING DONE. Traders are getting hooked up at that rate.
1. I agree with you that ecns will take more listed business, but try to trades NYSE issues that average less than 200K per day using ecns. These stocks are better traded with the specialist If you bid or offer in the book your odds of getting filled are greatly increased. In addition we are talking about the here and now for rates, not what could happen in 6 months 2. I was mostly talking about taking liquidity. 3. I trade on the the best platform in the industry, nuff said. 4. So what your trying to say is that if a stock really starts to move someone is going to hit your bid while the offers are getting lifted? You have been reading Secrets of the SOES bandit too much. 5. I'm talking about the basic cost to clear. If an individual makes poor business decisions like leasing space for $80 per sq foot then yes that will increase their cost o doing business raising the clearing cost. It about wise business decisions. You should stop pinching yourself it's affecting your thinking.
As far as rebates.... almost all ECN's are offering $2 to add liquidity. Think about it..... ISLD/INCA/ARCA and supermontage all charge $3 and give a $2 rebate. TRAC is giving $2.30 unless they go out of business first (see below) NXTD is now $2.75 to take and $1.25 to add (and that's if you can even hit them in the ADF). All of these ECN's have posted their rates on their websites. Really, its the truth !!!!!! That leaves 3 ECN's that do not advertise their rates BTRD, BRUT, and ATTN. BRUT and BTRD have a good reputation and although they don't post their rates, I am certain that they follow INCA/ISLD/ARCA/SM rates. And then there is the ATTN.... Now every ECN except the ATTN is charging $3 or less to take liquidity (except routing away). They are charging BD's anywhere between $3 and $9 per 1000. No wonder they are having a tough time collecting. Lets hope that they decide to jump on the bandwagon ..... or better yet, maybe they'll keep their price structure and go the way of LSPD/MKXT. One more thing..... you will see that many ECN's charge $4.00 per 1000 when routing away. Routing away for example is when you see a BRUT and cross them with an ARCA. ARCA will collect $4.00, pay the BRUT $3.00, and keep their standard $1 per 1000 fee for executing the trade. There really isn't a lot of margin for the ECN's. A Nasdaq trader who takes liquidity 80% of the time and gets rebates 20 % of the time, should pay an additional 2.40-2.60(based on routing away) per 1000 on top of what their base charges are. So a trader who trades this style and pays 3.50 per 1000 should have a net ticket cost of around $6.00. A listed trader generally doesn't do nearly as much volume as a nasdaq trader, so that is why a slightly better price is afforded to this type of trading. I consider about 4 million shares a month (200k per day) a nice amount of volume to get the good rates people are talking up on the board. I personally do about 7 million (If you cared). I hope this clears up what it really costs to trade Nasdaq stocks. Banker Track Data's Track ECN Changes Pricing Schedule to $2.30 Rebate/$2.90 Charge for Its ``TRAC'' Subscribers Monday January 6, 8:07 am ET Largest Rebate/Low Access Fee NEW YORK--(BUSINESS WIRE)--Jan. 6, 2003--Track Data Corporation (Nasdaq:TRAC - News) today announced that its Track ECN will change its pricing for its Rebate Model (Market Participant ID:"TRAC"). Effective immediately, subscribers will receive a rebate of $2.30 per thousand shares traded when they add liquidity. Market participants who take liquidity will be charged $2.90 per thousand shares, the lowest access fee of any major ECN. "With a charge of only $2.90 per thousand, traders will be looking to hit orders on Track ECN before others in the ECN tier," said Roderick Covlin, EVP of Track ECN. "That will please our subscribers, who will also be happy to get a $2.30 rebate." New Price Schedule for "TRAC," the Rebate Model For Nasdaq securities: Order that adds liquidity $2.30 per thousand shares Rebate Order that removes liquidity $2.90 per thousand shares Charge Track ECN's Other Pricing Model, "DATA," the Free Model In addition to the Rebate Model described above, Track ECN has recently introduced a second pricing model offering free access to market participants. Under Market Participant ID "DATA," Track ECN posts orders and does not charge an access fee to those who take away liquidity through Nasdaq. Using the Free Model, subscribers can display bids and offers in the first tier with the Market Makers (as opposed to the second tier, with those who charge an access fee). Both the Rebate Model and the Free Model of Track ECN offer subscribers anonymous executions, speed, and participation in Nasdaq's SuperMontage. Further information about Track ECN is available by telephone at 888/287-8832 or by visiting http://www.trackecn.com Track Data is a New York-based financial services company that provides direct access brokerage, real-time financial market data, news, and research to institutional and individual investors through dedicated telecommunication lines and the Internet. For professional investors, Track Data Securities offers proTrack, a direct access trading platform with fully integrated market data. proTrack offers unbiased trade routing, allowing clients control over where their orders are sent. proTrack is also available to broker-dealers as an execution platform. For individual investors, Track Data Securities offers myTrack, a fully integrated, Internet-based online trading and market data system. myTrack's direct access online trading has equity commissions starting at $12.95 per trade and allows users the choice of where to route their orders. myTrack also offers trading in options at all options markets, and over 6,000 mutual funds. In addition, futures trading in the E-Minis is available, with cross-collateralization of accounts. Futures trades are routed directly to the CME at $14 per contract per round trip. For additional information, please contact Rafi Reguer, Vice President, Corporate Communications, at 718/522-0222 or by e-mail: rafi_reguer@trackdata.com.
Neither one of you going to win this argument because as been mentioned before it depends on the individual trader and their needs - whether they take or give liquidity, etc.. Would be nice if one company owns both an ECN and does prop trading, they could offer very low rates to the traders and make some of it back when those traders provide liquidity on their ECN. Ticker's ECN fees are marked up a little which explains the .0035 rate, still works out to .0047 if adding and taking in equal amounts if you can stay within ISLD/INCA. (Avoid the higher rate ECNs) That is nothing to sneeze at, that's a very good rate. What do you guys charge for Supersoes/Supermontage?
Here we go again. 1. You didn't answer my first and most important question. What idiotic firm is giving you .003 for listed trades on 45,000 shares a month? The "here and now" as you put it will be here and now sooner than you think. ECN fees should be very important to you, even in small stocks, since ARCAEx and regionals are ITS compliant. That means you can use an ECN to hit them when they block the specialist's quote. Or you can use an ECN to outbid the specialist and get generally get a better fill (due to the fact that your ITS order cannot legally be traded around). 2. Dont see your point. ISLD is .003 to take not .0035. 3. No. Not enough said. This is personal preference and totally unsubstantiated. 4. What I AM saying is that pro traders who bid/offer are generally more successful. Am I saying that you can't lift an offer when necessary? No. I'm simply pointing out that ECN liquidity rebates are important to many professional traders (generally those who make a lot of money). 5. Clearing cost is only ONE expense Socrates. Do you have any clue what rent, compliance, SRO fees, legal fees, marketing, insurance, utilities, data fees, licensing fees, exchange fees, accounting fees, and most importantly technology expenses cost??? You can't run a firm without these expenses. Then you need to make 2/10 +/- profit on top of that to make it all worthwhile. Do the math. Your fairy tale firm isn't going to last too long with .0035 rates.
My mistake!!! I pay .003 for Isld and Inca. I didn't know I made and error on the taking of liquidity. The adding is correct .0012. Yea, I don't get the full rebate, but with my base at .0035 it more than makes up for the difference. Your answer to #1 is was stated earlier in the thead. ANDOVER The here and now issue, when the time comes, if an ecn becomes more liquid than the NYSE then I will reevaluate the best execution method, but for tomorrows trading I need to stick with what works. As for #4 THAT is totally unsubstantiated. 5. Einstein...what do you think are the total costs for a clearing firm?