NexTrade Cuts Fees Amid ECN Price War

Discussion in 'Order Execution' started by BankerBlueChips, Jan 5, 2003.

  1. Now that NXTD went from the most expensive to the cheapest..... it will be interesting to see what the only 2 ecn's charging over $3.00 per 1000 to take liquidity will do.

    1- TRAC is still $7.00 to take and $2.25 rebate to add.... but it seems that DATA (SOES fee only to take) is the way they are going. Most firms are not paying their $7.00 per 1000 fee. Notice how they went from consistent top 5 performer in SUPERSOES to nowhere as soon as supermontage started.

    2- ATTN is changing their deal daily it seems. Most firms are still not paying their ridiculous $9.00 per 1000 fee. I heard that they have just decided to give their traders $2.00 per 1000 rebate instead of the zero per 1000 that they were getting the last few months. It will be interesting to see how the ATTN can pay the rebate considering what happened to LSPD and their so-called guarantees.
    In supermontage, the Attain ECN has the right to charge whatever they want and BD's have the right to pay what they want...(hopefully zero).

    NexTrade Cuts Fees Amid ECN Price War

    NexTrade has cut its trading fees in a sign that intense competition and pricing pressure might well remain the dominant themes for electronic communications networks and other execution venues in 2003. NexTrade changed its rates on Jan. 2, slashing fees to $2.75 per 1,000 shares executed and offering a $1.25 rebate per 1,000 shares of added liquidity. This undercuts the major ECNs’ $3 fee on the execution side. The move is reminiscent of the lower pricing structure that Island initiated a year ago, igniting a price war among the ECNs that led to its takeover by direct competitor, Instinet. Following the merger, Instinet was able to restore some pricing power and terminated Island’s bargain-basement rates of $1.9 and $1.1 per 1,000 shares. “When Instinet bought Island and raised Island’s prices, they vacated a niche that NexTrade wants to fill. Accessing NexTrade quotes through SuperMontage is now cheaper than accessing the published rate of any market-maker or large ECN,” said NexTrade CEO John Schaible. “We hope to bring our pricing even lower. We want to be dirt cheap on SuperMontage.” Whether the fee-slashing strategy can exert the same pressure on the industry as Island’s discounting model did last year remains to be seen. Still, by giving market participants bargaining power, NexTrade’s attractive fee structure is likely to cap pricing at the larger ECNs. NexTrade also started quoting on the National Association of Securities Dealers’ alternative display facility (ADF) on Dec. 23, joining key player Instinet there. “We believe the ADF is a marketplace for the future,” said Schaible. “We think our ability to simultaneously post quotes in the SuperMontage and the ADF will give NexTrade users the greatest competitive edge.”
  2. About 6 months ago, there were many threads on flipping for rebates..... Using ATTN TRAC and NXTD to flip the likes of WCOM, JDSU, SUNW, CMGI, INAP etc....... we haven't heard much about this recently.

    I was wondering if it is still good using these ECN's (Not including INCA/ISLD).
    - Are the fills better in SM (ie: odd lots)?
    - Are the rebates still getting paid with the $1 fill plan ?
    - Are there enough stocks to flip ?

    If anybody wants to comment on how they are doing using the ECN's exclusively for profits (P&L basically flat) .... please share your feedback.


  3. Now every ECN except the ATTN is charging $3 or less to take liquidity (except routing away). ATTN is still charging anywhere between $5 and $9 per 1000. No wonder they are having a tough time collecting. Lets hope that they decide to jump on the bandwagon ..... or better yet, maybe they'll keep their price structure and go the way of LSPD/MKXT.


    Track Data's Track ECN Changes Pricing Schedule to $2.30 Rebate/$2.90 Charge for Its ``TRAC'' Subscribers
    Monday January 6, 8:07 am ET
    Largest Rebate/Low Access Fee

    NEW YORK--(BUSINESS WIRE)--Jan. 6, 2003--Track Data Corporation (Nasdaq:TRAC - News) today announced that its Track ECN will change its pricing for its Rebate Model (Market Participant ID:"TRAC").
    Effective immediately, subscribers will receive a rebate of $2.30 per thousand shares traded when they add liquidity. Market participants who take liquidity will be charged $2.90 per thousand shares, the lowest access fee of any major ECN.

    "With a charge of only $2.90 per thousand, traders will be looking to hit orders on Track ECN before others in the ECN tier," said Roderick Covlin, EVP of Track ECN. "That will please our subscribers, who will also be happy to get a $2.30 rebate."

    New Price Schedule for "TRAC," the Rebate Model

    For Nasdaq securities:

    Order that adds liquidity $2.30 per thousand shares Rebate
    Order that removes liquidity $2.90 per thousand shares Charge

    Track ECN's Other Pricing Model, "DATA," the Free Model

    In addition to the Rebate Model described above, Track ECN has recently introduced a second pricing model offering free access to market participants. Under Market Participant ID "DATA," Track ECN posts orders and does not charge an access fee to those who take away liquidity through Nasdaq. Using the Free Model, subscribers can display bids and offers in the first tier with the Market Makers (as opposed to the second tier, with those who charge an access fee).

    Both the Rebate Model and the Free Model of Track ECN offer subscribers anonymous executions, speed, and participation in Nasdaq's SuperMontage. Further information about Track ECN is available by telephone at 888/287-8832 or by visiting

    Track Data is a New York-based financial services company that provides direct access brokerage, real-time financial market data, news, and research to institutional and individual investors through dedicated telecommunication lines and the Internet.

    For professional investors, Track Data Securities offers proTrack, a direct access trading platform with fully integrated market data. proTrack offers unbiased trade routing, allowing clients control over where their orders are sent. proTrack is also available to broker-dealers as an execution platform.

    For individual investors, Track Data Securities offers myTrack, a fully integrated, Internet-based online trading and market data system. myTrack's direct access online trading has equity commissions starting at $12.95 per trade and allows users the choice of where to route their orders. myTrack also offers trading in options at all options markets, and over 6,000 mutual funds. In addition, futures trading in the E-Minis is available, with cross-collateralization of accounts. Futures trades are routed directly to the CME at $14 per contract per round trip.

    For additional information, please contact Rafi Reguer, Vice President, Corporate Communications, at 718/522-0222 or by e-mail: