What is the best direct access software and broker for experienced traders?

Discussion in 'Order Execution' started by tm689, Feb 23, 2018.

  1. When comparing fees you should be comparing apples and oranges. Lightspeed sells their flow mostly to Coda and Credit Suisse which presumably will have an impact on execution quality.

    Disclosure Information:
    Lightspeed Trading, LLC may receive reduced execution costs when routing orders to certain market centers such as Coda Markets and Credit Suisse. This cost savings is considered payment for order flow as defined under SEC rules. Payment for order flow shall mean any monetary payment, service, property, or other benefit that results in remuneration, compensation, or consideration to a broker or dealer from any broker or dealer, national securities exchange in return for directing orders.
    Lightspeed Trading receives payment for order flow from Merrill Lynch and Wolverine Execution Services for directing options order flow. Payments received averaged less than $.33 per contract.
    #21     Feb 25, 2018
  2. Lightspeed offers DMA routing where you can directly pick the exchange your order goes to. They also offer algo routes like CS, etc but if you don't want your order sent to CS, don't use those routes.
    #22     Feb 25, 2018
  3. mbondy


    Not sure where you're going with this.
    Doesn't IB match orders in their own pool first if smart-routed and sell their flow to Timber Hill? Looks like standard practice for brokers these days.
    #23     Feb 25, 2018
  4. #24     Feb 26, 2018
  5. #25     Feb 26, 2018
  6. Think execution quality would be better if they used Jane Street and IATS instead of Coda and Credit Suisse?
    #26     Feb 26, 2018
  7. JSOP


    Ok I just found out I am on the "Fixed" commission structure at IB. I am looking at the pricing structure right now. In the "Tiered" commission structure, there is a section on specific exchange fees that you pay/get rebate for removing/adding liquidity. Is that going to be charged on top of the tiered commission or is that included in the tiered commission? And with "Fixed" commission, everything including the exchange fee is included so I will never receive commission rebates even if I add liquidity on a certain exchange? How do all those work?

    From what I am looking at, no matter your trading volume, it looks like the "Tiered" commission structure is always better for you.

    Last edited: Feb 26, 2018
    #27     Feb 26, 2018
  8. mbondy


    Fixed commission is one price and you don't have to worry about extra fee's nor do you get rebates.
    Tiered is you choose the route and the exchange, fees vary accordingly but rebates are passed to you.
    Tiered may or may not be better depending on your trading style. If you're constantly hitting into/out of positions, you're going to have to make sure your routing strats are economic. For liquidity providers such as myself, tiered is the way to go.
    #28     Feb 26, 2018
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  9. JSOP


    Thanks for the confirmation. Wish I found this out earlier. I have been WAY overpaying commission for at least a YEAR now. Stupid IB!! Switching to "Tiered". So when you are using "Tiered", is it better to use Smart exchange or sending an order directly to an exchange taking into account also the execution quality?

    #29     Feb 27, 2018
  10. mbondy


    Take the time to familiarize yourself with the various exchanges and their incentives and create route strategies according to your needs using hotkeys.

    I would not suggest auto routing an order. That's lazy and will cost you money. However, trading is not only about cost per trade, so you'll need to devise some less economic routes to get in and out of a position quickly should the need arise.

    You are right on the tip of a very large iceberg right now re: order entry. If you put in the time and learn the nuances of each exchange, order type, and execution, you will save yourself money and have a distinct advantage over other players in both cost and execution.
    #30     Feb 27, 2018
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