NYSE and NYSE Arca Announce Changes in Equities Transaction Pricing, Effective March

Discussion in 'Order Execution' started by seasideheights, Feb 3, 2009.

  1. AJ21

    AJ21

    thanks for bringing this to my attention,

    much appreciated
     
  2. This is virtually meaningless...
    They are talking amounts on the order of 1/10 of one cent.

    If you are doing ultra-high volume AUTOMATED algo trading...
    $0.001 may make a difference...

    But any core, HUMAN managed trading operation...
    Must have profit margins in the $0.01 to $0.02 per share range...
    So < 10% of that just does not matter...
    In terms of routing decisions or your business model's viability.

    It's not even worth thinking about for me.
     
  3. tomu

    tomu


    Even if you are a trader only trading 1 million shares a month, 1/10th adds an extra $1,000 on to your monthly costs. And if you trade several million shares a month like a lot of traders do your monthly costs just went up several thousand dollars. 1/10th is not meaningless. There are plenty of black boxes that have an expectancy of less than 1/10th of a penny profit margin.
     
  4. That's EXACTLY what I said...
    This would only matter to black boxes.

    Last year I traded 37,000,000 shares...
    And netted slightly > $1 million...
    (The record volatility more than doubled my normal margins)...
    So if I got an extra 1/10 of a cent/share...
    That's only $37,000...
    Not enough to change a single decision I made in 2008.

    Someday when I'm doing 370,000,000 shares/year AUTOMATED...
    I may start to care about 1/10 cent rebates.

    But the main point I'm trying to make...
    Is that if you are trading manually and your margins are $0.002 or $0.003/share...
    You very likely do not have a viable long term business model.

    And black boxes are a great ADJUNCT to a traditional scalping operation...
    But are very borderline as a standalone business model.
     
  5. anyone wanna get that this isn't true, i'll even give ou 5:1
     
  6. cstfx

    cstfx

    37k new fee on little more than 1MM profit is 3.7% less profit. That's nothing to sneeze at.
     
  7. kean

    kean

    If it is such a small difference than why institute a change. They get greedy and perceive this small change (in their eyes) won't change trader habits. They will lose volume and reduce their revenue over time. By the time they figured out their mistake traders will have migratated and be content and comfortable using cheaper providers. Ecn's are the same essentially, it is a like commodity and the lower price grabs market share.Traders will increase their use of lower cost ecns like Edge.
     
  8. oriol88

    oriol88

    DeeDeeTwo, start posting with a new nickname...