"Tough to have negative ECN fees if you have per share"?

Discussion in 'Stocks' started by hoff57, Aug 13, 2018.

  1. hoff57


    Can someone look at the attached picture, and explain me why it is tough to have a negative ecn fee, if on a per share pricing structure.. ?

  2. H2O


    I assume his / your commissions per share are higher than ECN rebates.

    If you are charged per trade and trade large size, you're effective commission per share can be less than the ECN rebate (depending on size and commission charged), resulting in 'negative ECN fee' (i.e. ECN rebate)

    Edit - just saw you say you trade 1m shares / month... and you're asking this Q??
  3. hoff57


    Thanks for the clarification.
    Is it wrong to ask the question? What are your thoughts?, that 1m/m is too small?

    I am just preparing and getting as much info as possible. I usually trade 70k/vol day, but it differs, so just rounded it down.

    I would like to know your thoughts on the best approach. My style is scalp; feeler, add, add, cover in flushes, repeat.

    Thanks in advance
  4. bramnil


    If you're doing 1 mil just by yourself that is not small. I would certainly recommend that you look into ECN fees/rebates for adding/taking liquidity when you trade (especially if you're doing scalping). This can surely decrease your cost of trading. You can actually request it from your broker, they should be able to provide it. Keep in mind that your broker might be putting their "mark ups" and not passing through the full rebate.

    Are you trading by selecting the venues yourself or you just send orders through some Smart Order Router?

  5. hoff57


    Hi Bram,
    Thank you for you response, much appreciated.

    I will start of putting things into perspective. I've traded demo for 11 months, all market hours, sacrificed everything to get here.. and studied everything about routing, exchanges etc .. basically obsessed fulltime for a year. My stats are showing I am consistently profitable with very low risk. So at this point, I am fired up to trade live, and reading everywhere where I can get the best benefits.

    I only use limit orders, I have hotkeys for different scenarios dependant if I need to get in/out aggressivly or passivly / receive rebates / get out fast etc... they route to different exchanges - no market orders, well, this is all in theory, as its been all practise (das has live quotes and functions as real though.. as it delays on covers etc as well) - I am confident I can continue with this in real, as 10h/d with this made my intuitions and actions very.. ,, automatic.

    I've corrected my behaviors along the way and everything is very intuitive by now.. now I just want to start slow with a good broker and gradually work things up. I am not in a hurry for anything, just skill.. and I want a good broker to start off with so I dont get too down by all the ECN fees and commisions =) .. I prefer to hit the bid, but it depends on the situation - I read tape, vol, lv2 a lot. dont like longing so will only add liquidity if i am long biased.

    1m/month is what I will be trading real as well - i have defined all my position sizing and will stick to that until I prove I can prove to myself to gradually increase. But this is the vol I am used to and feel good with for now. My start investment is 30k. I can see I have 1-2k gross daily, pretty much consistantly for the last 3months at least. but i am mostly focused about risk, having as small unrealized as possible.

    However, I noticed my net,, and the ECN fees take quite some of it.. so I am looking into a structure where I can test and play with getting negative rebate fees. I am not sure if it is possible with a per-share structure.. From what I can tell, it would only be possible with a per trade structure. not sure. The brokers I am looking into are ;

    - Cobra Trading (trade through IB) - and I have seen they have less rebates than IB (as you mention yourself).. surely they have to make money as well. I will contact them and ask if possible to pass full rebates . They only have per share structure though, so have to ask if possible to get negative rebates if I add liquidity. don't think its possible though.

    - IB ... yea, read both good and bad.. not really sure about this due fees can quickly eat up + less customer service.. Cobra uses them though - but cobra have very good customer service at least.

    - Centerpoint securities. they have great borrows, and i am primarly short biased.. so in that respect they would be great!.. not much downside other than their fees are higher in generel. would be good to get some feedback. I know they have per trade structure and negative rebates are possible.

    -Speedtrader .. I like the fixed fee structure $2.95 per trade with upto 10k shares i believe it is.. that is good, and I only use DAS Pro, so that is perfect as well.. (IB and Cobra supports DAS as well though).. - what I dont like is that its owned by Suretrader. I am a bit biased about the founder (mintbroker). that is holding me back a bit.

    The fact that they do not have DAS is holding me back. I am so used to DAS by now, that I dont feel like jumping to another platform. Otherwise all good with LS!

    And I have not touched on Execution and fills etc, as I only have theoretic experience. Naturally the selection of broker should have top execution, but I think the ones mentioned are all good. I wont be using SMART routes anyways.

    So for now I am basically just wasting time and overthinking it.. I want to start and get going. I will take a decision this week and start the process.. but always good with pro traders response in here.

    btw - I understand paper trading is MUCH different than live, as im not adding/taking liquidity into the market. I've traded live before and messed up in the past way too much.. then I decided to take a year only trading paper untill, 'i got it right'.. now i am ready. So please ease on the paper-trade bashing hehe =) It's all been with live-quotes on DAS though:) It has helped me immensely to understand market structure and how people think/behave.

    attached one of my recent plays so you can see my style.

    Thanks for your time
  6. Robert Morse

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    bramnil likes this.
  7. hoff57


    Hi Robert,
    Thank you for that.. you are right - no sense in being afraid of trying something new =). I will give the platform a shot!.. Regards

    Robert Morse likes this.
  8. bramnil


    No problem, mate. From what i can understand IB might not be a good fit for you. Don't get me wrong, IB is a great broker but they aren't that good for day traders (just my opinion). For day trading, Lighspteed is way to go, no doubt about it (again, just my opinion).

    Regarding SMART, my guys are using it quiet a lot for aggressive fills. I would recommend that you still take a look at it. As for the rebate, it'll depend on the broker. Some give it per the venue, some give a fixed number. for SMART. Some people prefer as per venue some don't. My guys prefer as per venue as it fits our strategy better.