From the Trading Desk Message Board

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : From the Trading Desk

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next

To: smh who wrote (4019)	12/27/1998 7:13:00 PM
From: Jay Morrison	Read Replies (1) of 4969

SMH, your bid on TRIBY @ 1 1/8 is a prime example of what is wrong with many of the discount brokerages out there. They charge you $15 per trade (or some similar cheap price) but they can then route your order in such a way as to make the spread between the bid and the offer. For example, let's say the bid/ask spread on TRIBY was $1 bid, $1 3/16 ask. That means that your broker will not execute your order until the ask is down to $1 bid, $1 1/8 offered. They won't even tell the rest of the market that there is a bid at $1 1/8. They want to find a seller at $1, then they will give that guy $1 for his stock, and then charge you $1 1/8 for your purchase. On 1000 shares, your broker just made $125 bucks by playing the spread. This happening can allow trades to occur below your bid price. Your broker makes the most by having the order flow through their own system. Your broker could simply sell you the stock at $1 1/8, then immediately go to the rest of the market and buy it back for $ 1 1/16. They do this all of the time with other market makers. Discount brokers can't make money charging $10 per trade. They are making money by ripping you off on the spread. Jay

Report TOU Violation

Share This Post

Public Reply Prvt Reply Mark as Last Read File

Previous 10 Next 10 Previous Next