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Technology Stocks : Orbital Engine (OE)
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To: PIERRE HANDL who wrote (1591)5/29/1998 9:54:00 AM
From: PIERRE HANDL  Read Replies (2) of 4908
 
There is one explanation. Discount brokers get kick-backs from the market makers. What I mean is that brokers who direct the trades to the market maker, the market maker pays the broker a fee. In this case .04(A$) for each share. I do not know if this is illegal in Australia, but it does go on here in the US markets. So people may think they are getting a bargain because of low commissions, but really the broker trades with the market maker that gives the broker the best deal, skew the individual investor. This practise may be disclosed in the fine print clients sign when they set up an account. So when E-trade quotes a price it may not be the best price available. I am not saying that E-Trade does this, nor do I have evidence that they do this. I am only expressing an example. Anyone using E-Trade should discuss this with the office manager if this concerns them. On a 10,000 dollar order this can be significant.
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