rebate trading

Discussion in 'Strategy Development' started by zoo, Jun 23, 2006.

  1. zoo


    Anybody reccommend a book, cd or something that teaches how to "rebate trade" correctly? "Rebate trade" for a profit?
  2. If it were possible to learn to trade, simply by way of a book or cd, then we would live in a world of millionaire morons.
  3. zoo


    Ok, then does anybody know of any classes that are offered on how to "rebate trade"?
  4. What you need to do is watch late night television infomercials. They will offer you a variety of low-cost get-rich-quick schemes from which to choose. Pick the one which best suits your personality. Act now, while supplies last! Satisfaction guaranteed, or your money back! Rule the freakin' markets! Trading is fun and easy! If you can tell the difference between a red light and a green light, then you can achieve the financial independence and lifestyle you've always dreamt about! It wasn't a get rick quick scheme, but guess what, I did! Learn the secrets the pros on Wall Street use to make money no matter what the market is doing! And if you act now, blah, blah, blah, blah, blah.............
  5. zoo


    So what are you saying? It can't be done?
    I heard people are doing it and making a good living.
  6. Well, first you'd need to find commissions below $0.002/share.

    I think Swift Trade is one of the bigger players in the rebate trading game. You should probably start by talking to them...
  7. its not difficult at all but can be very very risky; imagine how good your prospects are in case the stock u just bot into with 100k shares suffers a hault...or maybe if u are short and some1 decides to make a sudden, aggressive and unannounced takeover offer...stocks ripes trough your order and gets up 100%+, boy boy, how u gonna get out there with your 100k shorts and massive demand for the stock?

    by the way all u have to do is to place huge size orders just 1c above the offer [if u sell] and 1c below the bid [if u buy] or u can lock the mkt with size on both sides, usually on low priced stocks goin' nowhere fast, like lu; u will get paid cuz u are not suckin' liquidity but addin' it since u are not at mkt ...once the stock gets to your b/e point or when [more rarely] it gets 1c in your favor, u just liquidate and collect the rebate + the eventual 1c profits.

    never done it myslef but i think there's really not much more to it.
  8. zoo


    Thanks for sharing, I'm new to this strategy.
    But I also read that people were doing this same "rebate trading" strategy with penny stocks under 1.00 up until a few months ago, then NASDAQ stopped it. Traders were buying and selling a .50 cent stock all day long and collecting their .03 rebate. A heavy volume stock of course.

    So what happens if LU dries up on volume? Then where do all the "rebate traders" go? Find a new low priced stock and start "rebate trading" it? I guess if everybody got together and started "rebate trading" "MAMA" stock, then they could make it work. MAMA is still over 1.00 and under 2.00. I'm not if that is how it works. Just an idea.

    I'd like to try this strategy. I'm sorta hesitant though. Not sure who all those traders on LU are. They might be the "specialists" waiting for me. Then the stock goes down a few cents as soon as I buy it. And I lose. This is why I'm researching this strategy before I try it. It's a very very risky strategy, like you said.
    Read the rebate trading article here
  9. Let me get this straight. I can buy 10,000 shares of LU for $24,000.00 at $2.40. Then I get .03 cents from the INET for buying the stock. So INET gives me $300.00 for buying the stock through them? Then I automatically sell LU for a profit plus I get the additional $300.00 for adding liquidity to the market?And adding 10,000 shares to the market?

    But what about when I sell. I read that they take another .03 cents for taking away liquidity away from the market. So then we are even when we sell, because we are giving back our rebate. They charge us .03 cents for taking away liquidity. Right? Or wrong?
  10. Surdo


    It has essentially dried out. To the OP, you only get paid when you ADD liquidity, so if you get hit on the bid, or taken on the offer you get a "Rebate", you have to be a little better than the average monkey trading, to break even doing this. There is Capital risk BTW!

    Anybody I know that was doing it, either stopped making money to make it worth the risk, or lost a slug of capital with a hot potato position.

    Let's see if anybody still making money, "Rebate Trading" posts here in the next few days.
    #10     Jun 24, 2006