JUNE 1st NASDAQ order routing ?

Discussion in 'Order Execution' started by mcelitetrader, Jun 6, 2007.

  1. mcelitetrader

    mcelitetrader ET Sponsor

    I have recently found NYSE fills being routed through the NASDAQ book even though I set the order to NOT route. I use INETD to place orders that go directly to the NYSE book bypassing the NASDAQ book. I have noted ECN fees being charged as though the order has been routed to NASDAQ book. When I speak to my broker the answer is:

    "I spoke to someone in Nasdaq Sales dept. just now. As of this change on June 1st, they said that the order can be routed out at the discretion of the exchange, that there is no way around this now!"

    At the discretion of the exchange ? This is news to me and I do not find this anywhere in NASDAQ material. Does anyone have any greater understanding of this ?

    Here is the material on the NASDAQ website : http://www.nasdaqtrader.com/trader/tradingservices/productservices/pricesheet/pricing.stm#routing

    Read the portion : Routing Fees for Non-ETFs Executed on the NYSE

    It seems as though the price for orders that DO NOT sweep the NASDAQ book has become blank. This price was always:

    Fee for orders executed on the NYSE that attempt to execute against the NASDAQ book $0.000225

    Fee for orders executed on the NYSE that DO NOT attempt to execute against the NASDAQ book is based on average daily shares of liquidity provided* (THIS IS NOW BLANK)

    Any information?
  2. mnx


    hey chief,

    this has been going on for a long time. (couple months)

    while the DOTD order type goes to the floor first, Reg NMS forces it to route out to other market centers so you don't lock the market....


    - mnx

  3. mcelitetrader

    mcelitetrader ET Sponsor

    The DOTD orders have changed starting on June 1st. Nasdaq wants to charge as you are using their system and "bypassing" their book. No way around this...it was nice having a cheap route directly onto the NYOB..... 0.00027/share.

    The next best route I have is SBSH at .001/share then BELZ at .0015/share. It will add a fair bit to my trading every day but what can you do but adapt. MNX....what route do you use to get onto the NYOB?

    Thanks for the response.
  4. Not sure what the confusion is here but I read this pricing sched. as saying that if you use the swpec to execute it will be anywhere between .00027 and .00035 per share depending on your firms volume. If the order routes, it can be between .0025 to .003 to execute depending on your volume tier. ISO orders are charged .003.

    As an aside I think NSDQ s price shedule and practices suck!
    They are theives who try to make things confusing by using statments like "excluding non-etfs", WTF. Anyways my disappointment with them and there pricing practices has grown over the last couple of years as they have become a behemoth through aquisitions. I hope as the whole landscape for execution routes changes with REG NMS and dark books and ECNs like BATS being created, that NSDQ gets its ass handed to it! Thanks for killing the Island ECN NASDAQ:mad:

  5. rayl


    Is this an NMS issue? If so, the routing out is required.
  6. mnx


    i add liquidity most of the time and don't trade a lot of shares lately so routing hasn't been a pain to me like it has most people I know... I use Nasdaq RASH DOT and Merryl Lynch most of the time...

    hopefully we can keep trading costs down, I wonder if an ECN that charged .0005 on both sides instead of the usual .002/.003, could do well?? I'm sure at least day-traders would really appreciate it, nobody would want to add liquidity I am sure, unless the fills were awesome...


    - mnx