SuperMontage

........presuming you trade with a broker that passes on the rebate. I believe that most still just have a charge per share for ISLD regardless of whether it is adding or taking liquidity. THus they are actually making .0035 or so per share (eg .0025 charge plus .0011 rebate) for shares where their traders are adding liquidity. I may be wrong on this but that is the way I understood it to work.

 

Any major direct-access brokers have or are to reflect the recent Island rate cut? From .0025 to at least .0019? Isn't it a 'pass-through' as many brokers claim?

MBT said they are to work on it, but it involves changes to their database so it takes time...
TradeStation Securities won't comment on it, just say that their commission schedule is on their web site.

So, any idea?

 

That's correct. Every broker makes money when their traders add liquidity on Island: $0.0011 per share + their Island ECN "pass-through" fee.
In your example, if the broker charges 0.0025, he makes .0025+.0011=.0036 per share for its traders adding liquidity on Island. The name "pass-through" ECN fee in this case is misleading, because the .0036 rebate is not usually passed to the trader.

Fohat

 

It's funny how rate increases are usually instantly reflected in the fee schedule, but for rate decreases there is always some lame excuse to procrastinate :"they are to work on it, but it involves changes to their database so it takes time" or "no comment" etc.

 

Interactive Brokers doesn't pass through ANY ECN or SOES fees (or rebates).

 

Eldredge,

Only brokers that charge extra ECN "pass through" fees are obliged to reflect an ECN rate change imo. They should pass the new ECN fees as well as rebates.

Interactive Brokers is not such broker, because IB charges a flat rate of half a cent .005/ per share (+.005/share for the first 500 shares of the order) all inclusive, and doesn't charge any extra ECN fees.

SciTraders question wasn't about such flat rate EDAT brokers, but for those that charge ECN fees, and if some of them have lowered their Island "pass through" fee, imo. I haven't seen such reductions yet, but I hope they'll come soon. That's why I posted the Island rate reduction info - traders to be aware and speed up that process.

Fohat

 

My only concern with supermontage is that how can I post my bid and offer?

If I do this through a participating ecn, I will prolly get a fill AFTER all the mm's on the same price level have been filled, because the ecn will have to levy a fee, because they are not operating for free. All this in expectation that most people will use the option in supermontage to give the cheapest route -ie a mm- preference while hitting a bid/offer (price time with fee consideration). I know I will.

Island hasn't agreed to join supermontage afaik. So this will mean that in order to see Island people will need two screens, or a sort of level 2, combining the supermontage and the non-cooperating markets. Not something that will encourage people to hit island.

Summarizing, it looks like (not being a mm) I can't bid and offer anymore with a reasonable chance of being hit at a good price, unless things are different from my understanding, or will change before going live. Or am I being presumptuous here?

Bachelier

 

Just wanted to clear this up:

IB charges 1 cent for the first 500 shares (inclusive) and then half a cent for each share above that. This as you pointed out, includes all ECN fees, etc. Plus they have a $1 minimum per trade.