Rebate Trading

Discussion in 'Trading' started by jennajameson87, Mar 25, 2003.

  1. Has anybody heard of rebate traders. They trade to make the rebate of the ECN. If they break even on the trade then they make the rebate. It adds up I guess. But my question is, isn't that painting the tape? Is it legal?
  2. Brandonf

    Brandonf ET Sponsor

    Its legal but your broker is the only one who is going to make any money off your efforts.

  3. But seriously, does anyone know if there is a firm that offers the following:

    No workstation fee, no monthly fee, no standard crippling balloon payment, no software fees, in other words you only pay commissions for the trades you actually make.

    If you always add liquidity (preferably to ISLD, but theoretically anywhere) and trade only about 10,000 shares per day, in 100-share lots, commissions (including all liquidity rebates, routing fees, etc. etc.) of less than .005 per share?

    Obviously, I wouldn't need bullets. Reasonable options rates would be nice, but not necessary. (I could just do options through IB, couldn't I?)
  4. Rebate trading is just another tool in a traders arsenal, provided you have a cost structure that justifies it.

    Last week I traded an average of 300,000 shares per day in lots of 5,000 - I pay $1.00 per ticket, and depending upon the ECN earn a rebate of about $1.00, to a little over $2.00 per thousand shares traded.

    You do the math.
  5. Indeed. On two different levels........when you talk about rebates - how much does this play into the actual pro/prop firm you trade from, or are you assuming already bottom of the barrel per share commissions such as .005, (as in some cases, I have seen ECN fees as high as .0075, never mind the additional per share fee with your trading firm) and also assume that all of your software/data feeds are free due to the monthly share volume you hit???>>>>>

    >>>So, when paying a ticket charge, is this in addition to a per share fee charge from your firm + ECN charge???

    With respect to the ECN, when there is a kickback or rebate, is this when you only added to the liquidity of a given scenario, or is there some kind of universal umbrella that kicks in regardless of what prop/pro firm you trade with and who clears you, the ECN rebates are xxx for xxxx.

    Any additional insights here greatly appreciated.
  6. nitro


    What firm!?

  7. Sorry - I'm not here to promote the firm I trade with. I've been chastised and accused of shilling when I only posted questions in the past - so i'm not going there again.

    I just wanted to reply to the question of Rebate trading. Obviously you must have a cost structure that justifies it, and if you do, as I do, it can be a great addition to your bottom line.
  8. fourcups

    fourcups Guest

    I also do this type of trading it has kept me in the business i would have packed it in 12 years has been wearing me OUT!
  9. i am intereseted in this style, essentially exploiting cost structures
    how did you guys adapt you rtradign style to make it work? if you are so kind to share that is.
  10. yeah, its called: "Mom & Pop Trading Shop"

    seriously, you might want to think which of the competing objectives are most important because when you invert the paradigm and use a terciary goal as primary you get skewed results. Normally the software and environment are primary, the cost of access (licensing, locale to your home/office, trading atmosphere / training) are second and then costs. Letting cost drive the equation might not produce the results you desire...
    #10     Apr 1, 2003