1
/
of
1
store-traders-com
Stocks & Commodities V. 29:1 (31): Q&A by Don Bright
Stocks & Commodities V. 29:1 (31): Q&A by Don Bright
Regular price
$2.95 USD
Regular price
Sale price
$2.95 USD
Quantity
Couldn't load pickup availability
Q&A by Don Bright
ROUTING AND REROUTING FEES?
Don, I have a question about order routing that perhaps you can help me with. I trade with a respectable brokerage that caters to active traders. Ive noticed in the last few months that I have been charged fees referring to routing, rerouting, and electronic communications networks (Ecn) fees. I place my orders to go to the Nyse, as suggested by my peers. I am told that there may be fees for taking of liquidity, and also that I may be entitled to collect rebates for providing of liquidity. Im not sure what any of this means, but now that Im being charged fees, I would like to understand it better. When I called the broker, they were very vague about it all, as if they werent sure either, but assured me that they were pass-through fees, not add-ons. Can you help? oldtimeguy
Excellent questions, very timely. Although I cant speak directly as to how your brokerage handles such electronic orders, I can explain how things work. If you submit a limit order to the Nyse (as you say) to buy Xyz for $20.10, and the Nyses best offer is $20.11, but the overall best market (Nbbo, or national best bid and offer) is $20.10 on an Ecn market center like Arca. The Nms (that is, the National Market System) requires that the Nyse ship the order to the better-priced market. Thats great, except the Nyse will likely charge you a fee for shipping the order out. These fees are usually about three-tenths of a penny per share, which can add up quickly.
ROUTING AND REROUTING FEES?
Don, I have a question about order routing that perhaps you can help me with. I trade with a respectable brokerage that caters to active traders. Ive noticed in the last few months that I have been charged fees referring to routing, rerouting, and electronic communications networks (Ecn) fees. I place my orders to go to the Nyse, as suggested by my peers. I am told that there may be fees for taking of liquidity, and also that I may be entitled to collect rebates for providing of liquidity. Im not sure what any of this means, but now that Im being charged fees, I would like to understand it better. When I called the broker, they were very vague about it all, as if they werent sure either, but assured me that they were pass-through fees, not add-ons. Can you help? oldtimeguy
Excellent questions, very timely. Although I cant speak directly as to how your brokerage handles such electronic orders, I can explain how things work. If you submit a limit order to the Nyse (as you say) to buy Xyz for $20.10, and the Nyses best offer is $20.11, but the overall best market (Nbbo, or national best bid and offer) is $20.10 on an Ecn market center like Arca. The Nms (that is, the National Market System) requires that the Nyse ship the order to the better-priced market. Thats great, except the Nyse will likely charge you a fee for shipping the order out. These fees are usually about three-tenths of a penny per share, which can add up quickly.
Share
