Hey all, I work at a NJ/NY prop firm. Recently, as some of you know, MKXT became the first soesable ECN known as LSPD(Lightspeed). My firm has told us that the charge for getting lit up by LSPD is astronomical. Something like .015/share in addition to the .002/share soes fee. Ends up being $17 for 1000 shares. I need to know if this is a fee my firm is charging or is LSPD really charging this high. It seems so wrong since you can't preference a super soes order. If I throw 1000/sh at the bid and it is picked up by him instead of other MM's that are there, it's the difference between paying $17 and $2. Please let me know if anyone else is dealing with this at their firms! Thanks!
Interesting.....it is true that many ECNs charge in that range for taking liquidity from their books. INCA is almost always a .015/share passthru through DAT brokers. How this works with SOES I am not sure since it was debated heavily during the SuperSOES/SuperMontage proposal period, and up until now, no ECNS were SOESable anyway. So the issue that you are touching on relating to a SOES execution is indeed a "new" one. Indeed this whole concept has had great relevance to the SuperMontage initative as the Nasdaq has proposed including these additional charges in the quoted prices of the Market participants. For example, say an individual trader via MarketXT/Lightspeed and GSCO were the only participants bidding stock at $50 and $50 is the inside bid. In the current Naz quote, LSPD and GSCO would show up alone at the inside bid (obviously). However under the original SuperMontage proposal, the Naz wanted to "discriminate " against (in this case) LSPD by "adjusting" their quoted price to reflect the (higher) pass thru fees. IN essence, the Naz said that a trader selling to LSPD was really receiving a lower price than what they would get from GSCO because of the fee difference. Of course the ECN's screamed and yelled about this and I believe the compromise called for traders-via their trading platforms-to be able to show quotes with and without the impact of additional fees charged by the quoting market partipant if your yourder is crossed with their quote. IN any event, there is no doubt that MarketXT is able to (and is) charging addional fees for accessing their liquidity. Apparently they can receive these fees even if their liquidity is accessed via SOES when LSPD is quoting at the inside market. The fact that you cannot "pick" who you receive your SOES executions from goes back to the issue just described. I imagine that with SuperMontage just around the corner, we will begin to get more clarification on this issue but up until then, I think a SOES fill via LSPD will simply be more expensive for us all. I will check the Nasdaqtrader.com site to see if I can find any more clarification on this.
Jethro- I don't know if thats true , but if it is thats f'ed up big time. I mentioned in on eof my past trade posts that LSPD was an Ax in a stock one day , and they definately were controlling the stock...he was using a 7 tier the whole time, it was crazy ho whe was moving it, so much so that I looked up the MM symbol to find out the he was MX "special clearing acct" do people use SOES much anymore?
I use it all the time, perhaps for as much as 1/3 of my aggressive orders (taking offers/hitting bids). SuperSOES IMO is just like another ECN. If a MM-any MM- (and now LSPD as well) is at the inside price, than a SOES fill is just a blink of an eye away. PS -MWSE (Chicago Stock Exchange) is the only other non-MM that is SOESable. As an ATS they chose to be SOESable from the moment they became eligible to make markets in Naz stocks
It's not so much a case of it being true or not, 'cause it is at my firm. I just want to know if any other firm's traders are incuring these fees or is it just my firm bending me over. Thanks for all of your input either way!
Wouldn't it be easier to just use ARCA since you only pay one small fee per share,with no other pass-thru fees, and it gives you the chance to trade with MM's and all the ECN's, instead of only with MM's using Supersoes?
It goes back to other issues discussed on other threads Vinny. If I uses SOES, it is becuase there is a MM right there right now and I am reasonably confident I can get a fill (IE as long as he does not pull his quote right at the instant I SOES the order). ARCA will not deliver the order to SOES until after its other three attempts at matching have been unsuccessful. BY then, the MM(s) that might have been there when I first went to route the order may now be gone. Have you noticed how MM's tend to dart in and out of the inside price levels in post SS days? THe inside market is very often occupied by only ECN's. As I have mentioned in other posts, I prefer to "hedge" by sending multiple orders via ECNs and SOES and then cancel after I am filled by (one of) the other order(s).
Since fills are nearly instantaneous, how in blazes can you cancel 2 of say 3 orders after the first one fills. no one is that fast, and even softwar ewould not be able to do that reliably. Sounds like you just bought 3000 shares instead of 1000, and more often when you DON'T want them.
Cybertrader is gonna charge .006/sh for LSPD executions starting 4/15. I just spoke to them about the potential conflict in the charges (SSoes vs. LSPD). They don't know how it's going to work yet. Will post when I have more information.