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Stocks & Commodities V. 30:8 (62): Q&A by Don Bright

Stocks & Commodities V. 30:8 (62): Q&A by Don Bright

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Q&A by Don Bright

WHAT ABOUT REBATES?

Im reading around these forums, and apparently you can get rebates for providing liquidity. What is this, how do you do it, and how much is it (rate, I guess)? ZapCoffee

Mr. Bright, on one of your webinars, I heard you speak about order routing in your firm. You spoke about rebates from exchanges and electronic communications networks (ECNs). Is my broker getting paid for my orders as well? Can you go into more detail about this rebate trading, and how it may affect the average retail trader? How is your firm different from retail in this regard? noobtrader

A couple of good questions. Things are constantly changing in the world of both retail and professional trading relating to routing and rebates. Historically, firms and traders are paid to provide liquidity, which means placing your limit orders and waiting for someone else to either hit the bid or take your offer. We now have inverse payment ECNs that actually pay us for taking liquidity.
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