I was asked by a firm what I would want if I could make the perfect brokerage... Here is what I said... Cheap commissions * Access to every ECN and exchange * A "smart" router to do the work for me * Electronic complex options * Electronic futures * Good stock shorting * Good customer service * IRA accounts no fees It got me thinking... maybe these firms do not know what traders really want. Maybe we should tell them. Anyone have thoughts on the perfect brokerage firm?
One that would also absorb all trading losses and spit out cash like an ATM when you make winning trades.
What you would like, and what is realistic may not be possible. Remember that a brokerage is a business. They need to be profitable. You can't expect to get the best of everything for the lowest price. I would rather pay a little more in commissions (if I were trading as a customer) and get better executions. I would be interested in my bottom line only. It is always a safe bet to go with the conventional wisdom....."you get what you pay for". This is not to say there isn't room for improvement. But obviously value is perceived differently by different people. Here at ET there are so many traders that are retail customers (whether they wish to acknowledge this or not). But there is no overwhelming consensus on what firm is the best to work with. If you uncover something that approaches being a perfect firm, or even one that stands out relative to the rest, I am sure everyone would want to know about it. And how you came to your conclusions. Best, RS7
In addition to ideas above: - An API that provides full access to all of the available features (myTrack is the closest in this regard) - Some of us need a per-share pricing schedule. Perhaps the ability to select per-share or per-order pricing periodically and per-account. - Good accounting. It's amazing how bad some brokerages are at handling this. Some are great at it (see http://www.elitetrader.com/vb/showthread.php?s=&postid=97568#post97568). - While some say there is a trade-off between cost and fill quality, I disagree. With the current electronic environment, all a broker's systems have to do is work properly. It doesn't matter which broker you use to lift an offer on Island - you get the same price. - While some say there is a trade-off between cost and customer service, I think this relationship is nowhere near as linear as some would make it out to be. Many things that people complain about with customer service cost very little (if anything) to improve. All it takes is good management with the proper attitude. Paying as much as 50% extra in salary for a great manager as opposed to just a mediocre (or bad!) one and hiring a couple additional quality control people would amount to no significant difference in cost for most brokerages.
I need the current IB plus: 0) Reliable REALTIME quotes - not one second snapshots 1) 1/2 cent a share 2) Fast Bullets accessible from the same software (TWS) Then I am one very happy dude. nitro PS Health Care would be huge!
You said it traderC. 1. .005 cent per share--no additional fees. 2. Free data feeds and Nasdaq Level II quotes. 3. Super fast executions 4. User friendly interface
Cheap with lots of data bells and whistles... granted. But you said "fast executions".... That is where I think the world of brokerages will have to step it up. ARCA is now offering a front end to retail customers. ISLD is now using SuperMontage. Soon there will be no need for brokerages unless there is something new they can offer. Anyone can route your OTC limit orders to ARCA and your market orders to SuperMontgage and have a system that will stand toe-to-toe with any "Smart" software. Is there something new that someone would like? A new way to enter orders? More functionality from the ECNs and Nasdaq services? There are many functions that are offered like reserve orders, NOW orders, Invisible orders etc.... How about order types... what is necessary... I like to have them all... GTC, AON, OCO, OCA (order cancels all), MAQ (minimum acceptable quantity), Trailing Stops, WOW (with-or-without) Anyone think a new, more market-maker-style of order entry would be good for the retail trader? With a continously updating bid and offer, that both sides of your market can be adjusted with one click. The future is being redesigned and the end user should be the designing architect. Maybe there is no room for brokers to reap their commissions in the future, maybe they are dinosaurs dying off one at a time.