When they internalize...does the op get the fill? sorry for the trading 101 questions...just confused. I suppost when it gets reported, the timestamp is when it gets reported on the TRF...not when the deal was consomated...what keeps this honest? I can see a big bucket loophole here...I have been trading the buckets over in Forex and have become allergic to them. ES
I think the ulitmate solution is to ban internalization and payment-for-order-flow enitrely. Internalization and fragmentation are costing everyone, and it's a really opaque cost to the typical retail trader. For brokers to call this "price improvement" is laughable. They are often "saving" the retail client 1 cent per order while screwing up the entire market's transparency, consistency, and fairness for a few more dollars through backend deals for the retail client's flow. Not to mention the fact that execution of these internalized orders is often horrible.
No, the OP certainly does not get the fill. That's the whole issue. OP was willing to display his order and participate in the price discovery process. He gets front run by an institution who takes no risk and doesn't participate in price discovery. In doing so the retail client who got the fill saves approximately 1 cent (literally) so institutions say internalization benefits the customer by giving price improvement (a joke).
So they steal from one to benefit the other...how does that help them? There must be a lie...just like in Forex. Making a market should not require these games. Can we in America just make money honestly? Does one have to cheat to be successful? I am getting so tired of it. Don't misunderstand me...I am a big supporter of Capitalism and feel that one should reap what they sow...but if one needs to lie and cheat to be successful then he or she is not good at their profession at all. I feel this post is on-topic because the OP uses the word steal, which I am beginning to think is not so harsh at all. Tomorrow is a new day and I am looking for a new drug. I need to get excited about my new adventure, but I grow disillusioned in my quest. I want to be positive, but I do not want to be a thief. ES
I suggest something in the middle: Keep internal off-market crosses but only within the same entity, segregated accounts not counting as one entity, customer A and customer B would be two separate entities, no matter whether the broker holds customer A and B funds in the same segregated account structure. This will ensure that financial institutions can still cross trades internally without ever hitting the market but it would bring back more transparency to the market overall.