With Robinhood, they screw you in a different way. You get screwed on the execution price which could be even worse and that you won't even know how much worse. At least commissions, you can see how much you got screwed because you can see how much you should've gotten vs. how much you got charged irl as all rebates and commission fees are published. With PFOL, you could've gotten a much worse price from a MM that paid Robinhood to execute your order vs. if you had sent the order directly to the exchanges and let everybody compete for it. With rebates in commissions, with several thousand shares, it's 10's or 20's of dollars but with execution prices, a worse fill by just several cents, you could be out several hundred dollars at least. So is RH better? I doubt so. We retail traders are screwed no matter what, either in commissions or execution prices. Why? Because we are small and they need to make money. One dollar more in our pocket means one dollar less in theirs and vice versa. Trading is a cut-throat business very much the same like the jungle. Everybody fights for survival. If the lion catches the zebra, the zebra dies. If the zebra escapes, the lion dies.
Well i am definitely not going to use Robinhood. I am just saying that retail traders are getting screwed no matter which vroker they choose. Trading is not a fully fair game for sure, unless you are a big institution.
I agree with your write up above(about delaying the orders). The reason broker may hold your order is because they have to pay the exchange proportionally to amount of traffic used. So if client sends limit order far away from the market and then cancels it, that is a waste of resources that can be avoided most of the time without adversely impacting the client. Also, it’s possible that the broker did send the order to exchange and it did provide liquidity but due to some bug it was not accredited correctly(the liquidity flags are a mess) As far as IB, they provide lots of value add and are not really catering to DMA client. After fruitless discussions I just decided that the benefits overweight the restrictions for my trading at current time. Keep in mind that brokers are middlemen and the margins are thin, so I wouldn’t say their intention is to screw the client.
This makes no sense. DNA's order was a limit order at the bid. It could be hit by the Ask dropping or a Mkt sell order large enough to exhaust the queue down to DNA's resting buy order. "Liquidity-removing" and "Liquidity Taking" are the same thing. (Or am I wrong? But this is the way I see it.)
This makes zero sense to me. If I owned an exchange I'd want as much traffic, as you put it, as possible. Many brokers hold limit orders away from the inside bid and ask on their servers, but it must be for another reason. Do some exchanges charge for order cancellation? -- which is a type of liquidity removal. Or, do Brokers that internalize orders benefit from holding orders on their servers until they are executable? There really is no such thing as Direct Access anymore for retail traders ever since the SEC required all brokers to screen orders before sending them to the exchanges. I would think that what we call Direct Access nowadays is not having your order held on your Broker's server until it's executable.
Ok, i think that answers it. Iceberg orders can get rerouted imo if NBO gets to your bid. Also i think some exchanges might charge taker fee on the non visible part.
I think this might explain this rebate issue if it is true. With IBKR I rarely used iceberg orders, but with my new broker I am using them more often.