If you're really doing 20-25 million shares a month then .003 is understandable. For the rest of us, .003 is a pipe dream. Any broker that would offer under .005-.006 per share for all but the biggest traders is either: (a) desparate for business to stay afloat, (b) close to insolvency, (c) a customer service nightmare, (d) lacking in adequate technology, or (e) all of the above and worse.
many firms offer .003 for decent volume traders, that is not unreasonable at all unless you are a really low volume trader, doing a couple of trades a day or something. 1600 shares are about 5 bucks. majority of traders now a days do trades in lots of 2k or more any way. my average comes out to 5 bucks a trade because i do large lot sizes, companies like brownco and rjt offer 5 bucks a trade. . they gave a .003 rate so that if i want to develop more and test my systems i can trade in 100 share lots and not have to worry so much about my commissions. the reason i went with this firm is that they are the only ones that gave me a max fee of 5. also their system is very solid and they helped me with my bbox system.
Quote from JK9: For the rest of us, .003 is a pipe dream. Any broker that would offer under .005-.006 per share for all but the biggest traders is either:... Depending on what and how you trade, it's not necessarily a good rate because of the ECN charges that may be added. If you routinely take liquidity from expensive destinations, IB's all-in rate of 0.005-0.01 (for example) may actually end up being cheaper than 0.003 plus ECN fees.
Ticker, If you think the phrase "you get what you pay for" doesn't apply to trading stocks then you've obviously never: -> traded with slow-ass software, -> had a firm shut down on you, -> experienced persistent busy signals and hold time at "trade support" -> had 3-4 day turnarounds for messages left with management, -> worked at an undercapitalized firm, -> not had access to (profitable) proprietary software tools and training -> been limited by 4-1 buying power. Technology and services that offer real trading advantages are very expensive. Being without these advantages can be even more expensive--for the trader that is. It's a brutal cut-throat market out there and saving 1/10-2/10 cent on commissions is not going to make you more money in the long run. Only better ideas, technology, and education can do that. ...and today's low cost providers (Andover, IB, et al) are simply NOT providing these things.
Who are these "many" firms that offer .003 to "average" volume day traders? I don't know of any. And where are all these people doing 2000 share lots?? All the traders I know are averaging 300-600 at a time, 1000 tops. Hell, the average trade size on Nasdaq is only about 500 shares. And trading at Brown & Co??? Are you serious? They aren't even direct access. I wouldn't be suprised if they still get paid for routng their order flow.
Brown & Co does still get paid for their order flow. If I remember it correctly, their site states/used to state something to the effect of "Specialists and Market Centers value our order flow because they know it comes from experienced investors, so that is how we are able to keep execution costs so low." Sneaky way of saying we sell your order flow, is what it is. I think they disclose more now, however I have not checked lately. Also, they do have the required SEC Order Routing Disclosure, but it is tucked away at the bottom of the page.
I'm not saying be pound foolish, but........ for many traders 2/10 of a penny is a substantial portion of their profits, and that razor thin margin can make a break some systems. I agree however that much in the way of value added services can come from a good broker, and to a certain degree you do get what you pay for in this biz.