if you park an order (buy) on ARCA @ 18.90 while ARCA is the best bid. Someone sends a sell mkt order to ISLD. According to reg NMS the order has to go to ARCA, who gets charged the routing out fee? 1) the ARCA buy lmt order 2) the ISLD order 3 or both
2. If you got charged for routing when you added liquidity (which is what it sounds like happened) you got robbed by your broker. It is possible that you thought 18.90 was the best bid, when just a small fraction of a second before you posted your arca bid, a large offer came on to NSDQ at 18.90. To figure out whether or not you added liquidity see if there is a difference between the time you sent the order and the time you got filled on the order.
i see what are you saying, but orders get routed to different exchanges all the time. What I'm saying is if you are sitting on the exchange posting the Best Bid (exchange A), and someone sends a sell market order to exchange B. Is the sell market order going to get routed to exchange A. Or is the parked order going to get routed to exchange B. what are the fees. Do both parties get charged a routing out fee? or just the lmt order guy? or the mkt order guy?
This should be a simple answer; if your resting limit order is sitting passively and being displayed at the inside and someone sweeps with a market order they will be charged for removing liquidity and likely a routing fee. There are a couple of important points here however. 1. You need to ensure that your order is a 'passive ' order, not a 'proactive' order. This used to be more important than it is today. Reg NMS means that everything must be connected so unless your order is sent with a DNS tag it should interact with all other participants. 2. Your order MUST be displayed in order to be filled passively by the mkt sweep. If you are hidden, then condition 1 above becomes more critical. This is because another exchange cannot route to you , or at least is not required to route to you under Reg NMS if your bid/offer is not displayed. What can happen however is that if your order is hidden but proactive, when the other exchange order crosses through yours , your hidden order (if proactive), can go 'live', and route out to the exchange that actually crossed through you. This could result in you being charged to both remove liquidity, and route to another exchange. As for costs, it will vary depending on the exchanges and order types involved.