In the interest of privacy, I don't want to reveal my holdings, but I concentrated in 3 stocks, 2 on the Nasdaq and 1 on the NYSE. If the spread between the bid and ask is say, 1/8 of a point, that's the Nasdaq market maker's profit which he pockets on each trade execution. So if the bid is $20 1/8 and the ask is $20 1/4, if you place a market order to buy, you'll usually pay $20 1/4, while if you place a market order to sell, you'll only get $20 1/8. At my Fidelity brokerage account, that's what always happens to me.
What I was referring to was that many times, even though the bid/ask did not change for a long period, my trades went through at the bid or the ask in my favor, depending on whether I was buying or selling--in effect, eliminating the spread. In the past, I've had limit order trades execute between the spread, but this is even better. In theory, if there is a market order on Island that matches your limit buy or sell, that trade will "cross" without the spread going to a market maker, and you'll eliminate the middle man and only pay the Datek trade commission. At least, this is how I think it works.
My price improvement came on a limit buy order, which executed 1/16 point lower than my limit buy price. Perhaps there was a rapid dip that Datek took advantage of for me, but who cares? The point is that Datek passed the savings on to me.
Also, I forgot to mention that server response, even in the first 30 mins. of trading have greatly improved for me. Delays were usually not more than a few seconds for quotes, and on the rare occasions I got a "server temporarily unavailable", I went to a different server and was able to get quotes again. There have been none of the infamous total outages (that I was aware of) in quite some time. I use the classic servers and I'm on a cable modem, so perhaps that is my advantage. All in all, I'm very pleased with Datek's executions and reliability over the past month.
D. Kuspa |
