The laws governing exchanges are meant to ensure that the rebates do not result in customers getting a worse price for their stocks. If an exchange has the best offer at a given moment, other exchanges have to send orders there. But in todayâs high-speed fragmented markets, there are several instances in which this rule does not protect investors. For instance, if a broker sends the first 100 shares of an order to the exchange with the best price, the broker can send the rest of the shares to another exchange where it will receive a larger rebate. Several academic studies have found that the cost of executing trades is at a record low. But Matt Samelson, the founder of Woodbine, said these calculations have not factored in the âhidden pricesâ that can be incurred when investors donât get the best price. http://www.nytimes.com/2012/05/07/b...a-conflict-of-interest.html?pagewanted=1&_r=1
Interesting how the NYSE always prided itself on getting the best price for the customer. The Rebate issue is a slippery slope since it contradicts Best Price practices upon which the NYSE was founded.
No. I don't think it's online. Best I could find is this link from Woodbine. http://www.woodbineassociates.com/Exchange_Performance_2011.html This 75 page report has 4 tables and 61 figures. For the full executive summary, table of contents, and more information please contact: Ryan Surprenant Director of Sales and Relationship Management Phone: 203-274-8970 ext 203 Email: rsurprenant@woodbineassociates.com
I didn't look at the study. I worked at the NYSE long enough to know when orders are being diadvantaged. Take firms that internalize orderflow for example. They pair off what they can and send any imbalance to an exchange. No price discovery there, is there?