Once you understand the very important differences between online brokers and professional trading firms, you will realize why you should dump your online broker!
Online brokers such as Ameritrade, ScotTrade, Fidelity and many others are the gateway to the stock market for most people. For savvy investors with larger balances or an active trading style, however, there are definitely better options that you should be aware of.
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We have discussed Payment for Order Flow (POF) and how High Frequency Trading (HFT) firms make money on your trades. We’ve shared how Maker-Taker affects the way that trades are executed. Now let’s see what you can do to improve your trading returns within this complex and often predatory environment. (more…)
As any reputable online trading broker would agree, the Maker-Taker pricing model can distort the market and alter the way market participants transact stock orders. Maker-Taker refers to a pricing model that exists in most exchanges, to encourage stock liquidity in their venue. (more…)
Latency arbitrage is the practice of one party, perhaps a predatory HFT firm, exploiting a time disparity and earning profits with a computer algorithm for trading, when that trade is executed solely because of a latency advantage. Latency arbitrage has raised many heated discussions among all market participants, the SEC and government law makers for many years, yet this unfair unequal access to US equity markets is still the main strategy of many predatory firms.
Let’s take a look at what exactly latency arbitrage means, why it occurs, and what we can do about it. (more…)
A day trading guide on stock order types is a dynamic volume, as new order types are continuously proposed, revoked or falsely justified. As Nasdaq continues to develop, propose, then either revoke or justify new stock order types that continually benefit the select few, let’s review some of these recent order proposals and how they impact investors.
Nasdaq proposed in November of 2016 a new order type they call the Extended Life Priority Order (ELO). This was shortly after the SEC gave approval for IEX to become the 13th US Stock Exchange. The ELO order type has been incorrectly compared to utilizing a time delay similar to IEX’s “speed bump”. (more…)
There is a lot of talk about the data access fees that the various stock exchanges are imposing upon brokers, traders and online equity trading firms, and for very good reason. All US Stock Exchanges, including the two largest in the world, the New York Stock Exchange (NYSE) and Nasdaq, provide market data through the Securities Information Processor (SIP), as is required by the Securities Exchange Act, for consolidation of displaying current pricing and securities activity. (more…)