What is the "best" DMA broker for Realtick i.e. Lightspeed, Master Trader etc????

Discussion in 'Retail Brokers' started by SWAS, Apr 22, 2010.

  1. SWAS


    Hi there,

    Firstly thanks for reading this thread and many thanks to anyone who takes the time to respond!

    I am looking at opening an account with a DMA broker who supports Realtick for intraday day and swing trading equities. I trade about 25-30 round trips per month and this will grow when I am able to look at the markets during the day (or night in Australia where I live!). I am not trading large positions (I never take a position size which is 25% of my buying power or risk of 1% of equity - whichever is smallest) and my account is just over $30k.

    This is my criteria in order of importance:

    1 Offers Realtick
    2 DMA with the largest number of Routes with no order flow payment conflicts from the broker
    3 Great customer and technical support (should my connection go down in a trade and I need to liquidate)
    4 Reasonable commissions and rates

    From this I have got the list down to either Mastertrader, Lightspeed, Terra Nova and NWT Financial in (my current order of preference). However, I'm not sure if Master Trader has access to all the Routes through Realtick. I think it is only with their own platform?

    Does anyone have any experiences or reccomendations on these?

    Thanks again

  2. Lightspeed is your best bet as it has lots of routes with Realtick and is the most stable of the 3 brokers you mention
  3. I use MasterTrader/RealTick for about 2 years now. Memory serves... outage experience had only been two times in the past 2 years. (Survived the chaotic market in Sep 2008 fairly well.) I consider their platform/linkage very robust.

    Commission rate is negotiable based on the actual trade volume you do.

    They offer about 10 different routes. I am not sure if they include the route(s) that you would like to take. But to me, most of the other routes are immaterial. I only use 2 routes for the past 2 years:

    ATD: that's their "automated market maker". I believe it is a computer-based HFT setup where they will hunt for the best offer/bid in all places to fill your order and in turn they eat the spread. If you take the ATD route, you don't need to pay any ECN fee.

    NYSE-ARCA: The ARCA route is one of the best to seek for liquidity in ECN. I use it for trades in the first few minutes when the market opens to take advantage of speed in a chaotic environment. But need to pay 3 cents a share (I think) ECN fee on top of commission.

    I used to use TerraNova but said bye-bye 2 years ago. They pushed their own "RushTrade" platform (now renamed as Tradient I think) instead of RealTick - better profit margin for them. But RushTrade/Tradient had stability issues that caused me losing money big time. That was that.

    MasterTrader is small. Only a handful of support staff. But it has its advantages too. Excellent service from them.
  4. SWAS


    Thanks for your input autotrader15 and Bolimomo.

    It has taken me some time to get my head around the direct access, market maker and ECN concept and the various fees they attract. In Australia there is only one exchange (soon to be two) and you simply have direct access. However, the transactions costs are comparitively much higher.

    Bolimomo from reading your response you trade intraday. I was told in a book to look for a broker with as many routes as possible in order to get the best possible price. From what you have written you are comfortable using only two? Am I being too anal looking for a broker who has a high multiple of routes?

    Do you use the ATD frequently?

    Additionally I would assume with so many routes to choose from you would probably have to use an automated method of hunting the best possible prince anyway?

    Thanks again,
  5. SWAS


    Also Autotrader15. Have you had to call Lightspeed during peak times to liquidate a position? If so were they effective?

    Many thanks
  6. yes..very attentive and quick on the phones..
  7. SWAS it may not necessarily help to have as many routes as possible, depending on how you trade. I trade highly volatile stocks (such as AAPL and GS and FAS) intraday. My need is fast execution. I don't have time to hunt around different places for the "best deal". One or two cent, or even up to five cent difference doesn't concern me too much.

    I am not sure if MasterTrader/RealTick gives you SelectNet to send an order to a market maker of your choice directly. Maybe you will be limited to the market makers of their choice (such as CITI (is this CitiBank?), NITE (may be Knight Capital Group?), and UBSS (UBS). Anyway... I am not interested to use them. NYSE-ARCA and NSDQ (Nasdaq) are not all that different. There used to be many more ECNs. But many had merged and got bought out or something.

    I am comfortable using ATD. I use it for about 90% of my trades. I only use ARCA for the pre market (ATD doesn't work in pre/post market) and the first few minutes only because of the speed. The rest of the day I use ATD to avoid paying the 3 cent ECN fee. That's $3.00 per 1000 shares. It can be higher than the commissoin itself.

    ATD, a computerized market maker, will seek for liquidity to fill your order once your limit price is reach (or if you use market order instead of limit order). It searches the orderbooks in other ECNs or market makers, etc.. It probably will work much faster than you trying to manually hunt for them. They make their money by taking the difference between your order and the other party's order. Sometimes it can be sub-penny. Many times I get price improvements in sub-penny. For example, if I ordered to buy 500 shares of AAPL at 240.50, they may give me a fill at 240.4921. Something like that.

    Enclosed is a clip from my RealTick level-2 screen. Sorry... only 7 choices from MasterTrader.

  8. SWAS


    Thanks Bolimomo for your detailed response! Also Autotrader for your insight into their customer service.

    From what I have investigated if you are trading with frequency with trade sizes up to 800 shares Lightspeed offer pretty good flexibility and are cheaper. However for larger lot sizes they can get quite expensive. With anything in trading it comes down to personal circumstance i.e. trade size and frequency and it needs to be weighed up with the customer service and reliability, not just the best rates.

    My only question for Bolimomo is how could the .003 (or $3 for 1000 shares) ECN fee be more than the commission when their 100 lot share trades are $2 (or 500 for $4.50) or with their other option $6.95 unlimited size?

  9. SWAS: Sorry for the late reply. Just saw this.

    With my trading volume, I am paying $3.50 flat fee per trade regardless of size. And I typically hit 1k shares to 2k shares at a time. With the ECN fee of 0.3 cents a share (sorry for the earlier typo but I figured that you would notice)... $3 per 1000 shares... sometimes I pay $6 just in ECN fee, plus $3.50 commission, that makes it $9.50 for the transaction (just the buy or sell side). So...

    If I trade using ATD, I just pay $3.50.