New BATS ecn ( rebate of 3 mils to remove liquidity)

Discussion in 'Order Execution' started by WhiteOut56, Oct 14, 2010.

  1. This confuses me. Shouldn't they be giving rebate for adding liquidity not removing? The spread for this to work must be huge.
  2. They are competing w/ NASDAQ's BX 1 mil rebate & Direct Edge's EDGA 2 mil rebate.

    3 mils is a pretty big spread for BATS to cover.
    probably will just be a teaser rate to introduce the new ecn

    or, perhaps BATS is really making $ when they route to the dark pools. If you hit say 10.5099, they charge you 20 mils. Wondering what they pay to the guy who had is order @ 10.5099 that provided? or maybe that guy actually pays BATS (which he should) as being able to front run like that is an extreme advantage
  3. Can you route to this ECN trough IB?
  4. BX and EDGA give positive rebates for market orders?
  5. yes
  6. Occam


    I certainly don't mind getting rebates, but I sometimes wonder whether we'd be better off, as a whole, with equal charges for both sides on all exchanges -- it might reduce a lot of confusion, as well as the ability of retail brokerages to engage payment-for-order-flow.
  7. No, it would kill competition among the ECNs and we'd all get stuck with paying flat fees to execute which would be higher than the current trading costs of today. The presence of BATS and EDGX have significantly reduced costs for execution (their spreads between the rebate and take-liquidity charge are much more fair than ARCA/NSDQ) and squeeze other ECNs to make them more fair. Having different execution options allows for trading strategies based off of inefficient order entry, and enhances liquidity.

    CBOE $1.40 is really nice, as of now the best way to route is:

    BYX (when it's there on all symbols and becomes liquid)

    If you watch as a price level goes, ECNs generally disappear somewhere close to that order, but not always... savvy executors can profit.
    #10     Oct 17, 2010