Understanding internalization and payment for order flow. http://premarketinfo.blogspot.com/2012/02/where-does-your-retail-order-go.html
there was a brief period(2000,when i come to the stock market) when imo market was very retail friendly and "fair"..not anymore.. we are moving backwards at full speed in terms of transparency..data fees are getting higher and higher, you have to pay for each feed separately,there less and less info for retail,various regulations,checks etc slowing down our orders..there is no single rule out there that favors retail guy. NONE. as for $40 trades-pick up the phone and call your broker..there is your $40 trade. just like 10-30-50 years ago..
some firms still send flow direct to exchanges without taking a piece off the top though or matching it internally. why are you guys complaining about cheaper commissions? Would you rather $40 a trade then $10? get on board with someone who doesnt make a market off your flow and slow down your execution. go real direct access. the market has changed and trading styles have changed and commission has needed to change as people became more active with the introduction of electronic access to the market. im in the market now for a new firm actually so if anyone has any thoughts on where to go let me know.
I am convinced that the internalization game is so critical that no market making operation out there can sustain long term success without securing their own source of retail flow. The public exchanges are so efficient that extracting a profit is like squeezing blood out of a rock, unless you have a very unique edge or forecasting algorithm.