Stocks & Commodities V. 32:1 (55): Q&A by Don Bright
Product Description
Q&A by Don Bright
FIRST, A NOTE OF THANKS
First of all, I would like to thank those of you who noticed my absence in the past couple of issues of this magazine. I think it’s my first “misses” in the 10 or 12 years I’ve been writing this column, and I thank the staff at S&C for bearing with me while I recuperated. Now on to some questions…
ORDER ROUTING, REVISITED
A while back you wrote about order routing, rebate trading, and how traders can profit from all of this. I wasn’t trading much back then, but over the last couple of years I have increased my shares considerably. I was wondering whether things have changed much. Also, do you know which brokers pass through these savings?
Regarding routing issues, you are absolutely correct to verify that your broker allows for pass-through revenues (as well as pass-through charges, in the interest of fairness) that you incur through your trading. In Figure 1, I show some recent examples of some order destinations and the amounts involved (thank you to Goldman Sachs Execution & Clearing for providing this sampling).
There are literally dozens of destinations if you include the dark pools. I’ve posted just a short list here to show how the whole process works. This handful of ECNs and the NYSE handle a large percentage of liquidity.
FIRST, A NOTE OF THANKS
First of all, I would like to thank those of you who noticed my absence in the past couple of issues of this magazine. I think it’s my first “misses” in the 10 or 12 years I’ve been writing this column, and I thank the staff at S&C for bearing with me while I recuperated. Now on to some questions…
ORDER ROUTING, REVISITED
A while back you wrote about order routing, rebate trading, and how traders can profit from all of this. I wasn’t trading much back then, but over the last couple of years I have increased my shares considerably. I was wondering whether things have changed much. Also, do you know which brokers pass through these savings?
Regarding routing issues, you are absolutely correct to verify that your broker allows for pass-through revenues (as well as pass-through charges, in the interest of fairness) that you incur through your trading. In Figure 1, I show some recent examples of some order destinations and the amounts involved (thank you to Goldman Sachs Execution & Clearing for providing this sampling).
There are literally dozens of destinations if you include the dark pools. I’ve posted just a short list here to show how the whole process works. This handful of ECNs and the NYSE handle a large percentage of liquidity.
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