Execution: Retail vs Prop

Discussion in 'Retail Brokers' started by matador04, Oct 14, 2009.

  1. Yes, you would. But if you route to a market maker with a knowingly worse price than available then this is not "making money", it is fraud. Criminal.

    You don't have the right to willingly fuck up a paying customer and a broker has to act in good faith.

    Selling order streams is one thing, taking money for routing to a (known) worse price fill is fraud.
     
    #11     Oct 30, 2009
  2. Regulation NMS does provide some very important protection for retail brokerage customers, but it still allows brokers a very wide range of discretion as to how to route and to re-route customer orders. The industry norm for brokers is to take bribes from market makers, called "payment for order flow", in exchange for causing customer orders to receive inferior executions. I am glad that IB's smart router exceeds industry norms, because it intends to get the best price for the customer, rather than to maximize bribes paid by market-makers to the broker.

    People who want to learn more about the broker's room for discretion should learn, among other things, about the strengths and weaknesses of Regulation NMS, and some useful info is available on the SEC's website.
     
    #12     Dec 16, 2009
  3. Benign

    Benign

    Every discount broker claims they beat industrial average so I really don't know what industrial average is really about. For example:
    http://www.zecco.com/trading/tradeexecution.aspx
     
    #13     Dec 19, 2009