I may be wrong, but I believe that for someone to hit a bid, someone else has to have placed that bid. That would mean that 50% of all ISLD orders are from adding liquidity, and 50% of all ISLD orders are from taking liquidity. ISLD pays pros for liquidity to provide a tight market for customer orders from Datek and the retail shops, I believe. It is paying us to buy bids and sell asks, which is the side of the business we want to be on from what I know. But in the end it really depends on the individual trader's style as to which is better.
I'm not trying to dispute any of what you (or anyone else) is saying about Island and the liquidity...but, as you know, DATEK has retail customers who (for the most part) are simply placing orders on the Island book...this is where the bulk of the orders come from. Professional traders, for the most part, do most of their trading by hitting bidsa and taking offers. If you simply "follow the money" - you can guess why they are "paying" for added liquidity, so that they can service more orders, much like the "selling of order flow" - not necessarily a bad thing, just something to be aware of.
Yes, I trade remotely with them. I trade mainly (99%+) listed stocks, so I am not an expert on the Nasdaq stuff. But I am very happy with them, and definitely would recommend them for anyone looking to go pro, or pros looking for another firm. From being on both the retail side and pro side, I am a big fan of trading pro, with pro leverage and rates, and while I prefer Echo, I think all of the pro firms offer a better package for full-time traders than retail firms do.
Yes, under normal rates. If you are a large trader and receive volume discounts it gets much cheaper than that. IE: the largest traders, under normal 0.0075 cents structure, would pay 0.0064 cents for adding liquidity, 0.0094 for taking liquidity. But that is the right concept.
TraderJim, i see that Echo offers .004 per share for ARCA orders. When trading Nasdaq, does this fee include the selectnet and supersoes fees or does one pay the .004 ARCA fee plus those nasdaq fees? Also, is it .004 whether adding or removing liquidity?
vinny1, From what I know their arca fees include everything, ie: you do not pay extra depending on where arca goes for a fill. Good news in that link posted on the previous page by crazy_trader, looks like INCA is going to start paying a rebate soon. That will be good for any Echo guys that use INCA, don't know when that is supposed to go in effect. But good to see the ECN's becoming competitive with each other. Also have been hearing for a long time that whenever ARCA completes their merger with the Pacific Exchange, they were also talking about initiating rebates for adding liquidity. I might have to start figuring out how to trade Nasdaq.
Hello Don your guys trade listed stocks remember? I think I tried to bid a listed stock once.....yeah that worked well. I would venture to say that DATEK's lame retail customer base accounts for less than 10% of ISLD volume on a daily basis. Another example of Don's ignorance of the Naz market. Give me a break, you think that the lame Datek retail customer base is responsible for providing the "bulk" of the liqudity in the ISLD ECN!? More importanly, with a decimalized one penny spread Naz market the line between passive and aggressive orders (posting bid vs. taking offer) is hard to distinguish. Often we go to post a bid at the inside only to get an instant fill becuase ISLD sellers were already crossing the market. Thus we were "adding" liquidity from the perspective of the L2 screen, but in fact our order actually takes liquidity from a (crossed) ISLD book. And Don, what is happening more often than not in a Naz stock lacking significant momentum....it trades back and forth between the bid/offer. Answer this for me. When I am buying stock at a support level-where some traders are speculating that it will fail and others are speculating it will hold-why not bid out half my position for a better fill rather than just take the offer? Do your traders only trade breakouts when the stock is running already? Let's see 30,000 shares a day times 220 active trading days times 30% of them that I get a penny better fill by bidding/ offering...hmm translates to almost $20,000 per year (not to mention the rebate if I in fact get it). Sounds worthwhile to me. Your "90% of our trades are taking offers and hitting bids" is a foolish execution mentality in the current Naz market. Oh yeah you guys don't trade Naz stocks. So why are you commenting on this issue anyway?