my background is entrley in fx........i have a question regarding equities mkts......what are credits/rebates, and how do they work????
Rebate traders are paid for "adding liquidity" to an ECN. If you get hit on the bid or taken on your offer you get paid a small percentage. If you take liquidity from certain ECNs you pay a commission. Some brokers pass on these fees/rebates to the customer while some do not! In my opinion, this is perhaps the slimiest way to make a living, but some guys still do it.
pardon my ignorance please if u make a bid or offer on your shares and someone hits them u get the percentage????? how much is the percentage typically? why is it slimey.....???? if i understand correctly.....this is what i would functionally equate with placing an entry order and getting filled....would u say this is an accurate comparison....???
Here is an example of Instinet's Rebate schedule. Rebate per executed share of $.0020 for trades that add liquidity to the INET book. Charge per executed share of $.0030 for trades that remove liquidity from the INET book.