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Hmmmmm,
A few items on the comments below:
In the case of those traders who don't believe fills
matter, fills in a retail division versus fills in
a professional division are *not* the same. This is
because the best floor brokers are used for the
professional services. This easily saves a tick in
and a tick out in both futures and options. (Sometimes
more.)
I carry two accounts. One with a professional division
and one with another IB and clearing house through
what might be considered the retail division. I use
the retail account to test systems so I can see how
they will do in a hostile environment. :)
Here is an interesting note. At one time i was
carrying the same set-up. One retail account and
one professional account. BOTH USED THE SAME
CLEARING HOUSE. Though the professional service
had a base fee that was two dollars more, they
consistently got me 1 tick in and 1 tick out.
The retail service NEVER got better than the
market price.
How do you know if you have a good floor
presence working in your favor? If you
NEVER get better than the market, you
are consistently filled at the worst
possible price your order allows, and
you never get disputed fills arbitrated in your
favor, you are dealing with a retail dog and
you need to move. If you are
consistently filled 1 tick better than the
market, often get better fills than the worst fill
that your order allows, and have a trading desk
that fights tooth and nail for a disputed fill
to go in your favor, then that extra two or
three bucks in base fee is well worth it.
Currently, the retail guys run $14 per round turn.
The Pro guys run $16 per round turn.
So, yes you can get superior service at discount rates.
Remember that fills are *not* the same accross the board.
Walt Downs
CIS Trading
Clint Chastain wrote:
>
> This is a very well though out post. I couldn't agree with it more.
>
> The brokerage profit margins of old - and to a lesser extend, today - are
> just too fat and too temping for someone new and hungry and efficient not to
> come in and undercut. As Brian Massey correctly points out, they're all
> selling essentially the same thing from the same source(s) anyway.
>
> And BTW, I intend no disrespect to those in the brokerage industry. Everyone
> is entitled to try to strangle out a living somehow. All of us in whatever
> field we operate need to remain aware that life is not static; times do
> change, and we need to change with them, or risk being left behind.
>
> Along the same lines being discussed, I think that market data and quote
> delivery will eventually become essentially a pure commodity item, like
> gasoline or toothpaste. May not be in our lifetimes, but it will happen.
>
> Even in light of the various interlocking "strategic alliances" between
> exchanges, data vendors, and software marketers, there's really no plausible
> or justifiable reason that I can see for the industry to demand that we pay
> several hundred dollars a month for what is an inevitable and natural
> byproduct of the the trading system.
>
> Their standard counter-arguments about bandwidth consumption and server
> capacity utilization seem to me to be really nothing more than thinly veiled
> hedges against lethargy, complacency, and arrogance.
>
> Who knows? Maybe in ten or twenty years we will all have the option of
> buying our data directly from the exchanges themselves. Assuming, of course,
> that we have elected not to go with a brokerage firm that gives it all to us
> for free anyway.
>
> These trends are all clearly established in their earliest stages now, and
> the whole process has a name. It's called disintermediation.
>
> Just my 2 cents worth...
>
> Clint
>
> -----Original Message-----
> From: Brian Massey <bnm03@xxxxxxx>
> To: List, Omega <omega-list@xxxxxxxxxx>
> Date: Sunday, November 29, 1998 7:11 PM
> Subject: RE: Daytrading article in WSJ
>
> >"Beware of very low commissions....the FILL is the most
> >important part"
> >
> >The age old argument by brokers who want to sell you a Saturn for the price
> >of a Lexus....
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