Pricing for Executions

Discussion in 'Order Execution' started by fcelfcel, Mar 7, 2003.

  1. fcelfcel


    This is what everyone is charging

    Isld add .002 remove .003
    Inca add .002 remove .003
    Arca add .002 remove .003
    Soes add .002 remove .003

    All these execution systems NET .001. Why don't they just charge .000 for adding and .001 for removing. This will decrease the cost for traders trading. Since pricing will decrease maybe traders will want to trade more and create volatility and increase volume.

    What do you guys think?
  2. Eldredge


    Interactive Brokers doesn't charge or pay anything. .01/share up to 500, .005 over 500, $1 minimum. No other charges. Nice and simple - just the way I like it.
  3. fcelfcel


    uuhhhhhh, Liquidity trading is BS trading. what kind of a concept is that to make money by providing liquitdy, all liquidity traders do is stop the natural flow of stocks and get money for doing that, and they dont make much money any ways.

    It is a worthless use of talent for not so talented people. for people who want to trade, they have to pay a higher price trading.
  4. fcelfcel


    you are in the wrong thread buddy.
  5. how many of you out there are doing this type of trading? I have started to hear more and more, does it really work?
  6. No, I think it would decrease the cost for investors trading and decrease the rebate for traders trading. The only thing that I don't have an opinion about is the effect of your proposed rule change on traders investing.
  7. I have never called anyone on this board an idiot, but you are tempting me.

    An interesting observation I have often made is that those who know nothing about what they are talking about always sound most certain and dogmatic.

    That makes me wonder about my own posts here on ET.

    But then again, at least I HAVE been called an idiot on this board.
  8. The pricing issue for ECNs and Nasdaq (whose function is really just another ECN) is as follows..

    In the battle between the ECNs and Nasdaq for who will get the business, the trades will be done wherever the best price for the stock is - for an ECN (or Nas) to get the Best bid/offer, they need more liquidity than their competitors.

    This should be the goal of all ECNs and Nas and not lower prices for liq takers, hence the .002/.003 price structure as opposed to a .001/.000 pricing. If anything, the rebates/charges will go up (the ECNs favoring higher rebates over lower charges for takers)instead of going down.

    Even if an ECN charges .005, people will hit it if they are getting a .01 price improvement over another ECN or Nas. The compelling issue for ECNs regarding pricing is the amount of their rebates and not the amount of their charges, as long as its kept under .01. The exception would be in the case where there are always many ECNs at every price level, in which case the ECN with the lowest take fees has an advantage.