Quick Q regarding adding and removing liquidity

Discussion in 'Order Execution' started by wiesman02, Feb 13, 2008.

  1. So I always execute market orders. I pay .004 cents per share in fees, but I'm only trading 100 share lots right now.

    Yesterday I lost $65, but w/ fees i ended up w/ $104 in loses.

    Only traded about 4600 shares i believe.

    I'm on sterling and can't get it to show all of my fees.

    So if i'm executing only market orders does that mean I'm always removing liquidity ? So i'm really paying like .007 cents per share ?
  2. mnx


    Yes, market orders will always remove liquidity. you mean .004 $ per share not cents btw... If that is indeed your comission rate, then yes you are paying an extra .003$/share to remove liquidity.

    - mnx
  3. If you want to trade quickly you demand liquidity a trader who places a market order will always pay the bid/ask spread you take liquidity when you accept offers standing limit orders or quotes other traders have made.
  4. I'm sorry. yes I'm $.004 per share. $4 per 1000 shares.

    I'm not scalping. But i'm not holding too long. On a $50 stock, I'm looking for a 40-50 cent gain. Usually i'm holding btwn 10-25 mins Therefore, if the spread isn't that high, should i be placing a limit order of a penny above the ask if I'm going long, to save myself from removing liquidity every single time ?
  5. If you buy by placing a limit order a penny above the ask, you are still removing liquidity. You need to join or penny the bid, or place a buy somewhere between the spread and hope someone hits you. Then you'll be adding liquidity and will be paid a credit (assuming you are routing to an ecn that pays for adding).
  6. My suggestion is to buy/sell on ARCA and if not available then route out from there...active traders understand this and fees will eat you alive if you don't watch how/where you preference your trades...

    If you work under the above example you should be getting more rebates than paying, hence reducing your overall trading cost by approx. 25% or so a general rule of thumb.

    Many will argue doing this will allow you to miss a trade or two but in the long run it continues to work for me the vast majority of trading days.

    Good luck!
  7. Simply "Take on NYSE" "Park on ARCA" - unless you really need something, then take on NYSE, never ARCA or any other ECN for taking.


  8. Tried that today. Thanks man. Placed a limit between the spread for both my buy and sell order. Saved a buck for 200 shares total.
  9. Forgot to note that I figured out how to see all my fees. Gotta load 'default fees' file under settings. That might freaking help. Lol.
  10. Good point taking from the NYB costs a lot less [0.0008 per share via EDGX RDOT]
    #10     Feb 14, 2008