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Just about everything on the securities side in the U.S. trades electronically. E Trade simply does there business with a dealer(either their own NASDAQ arm KNIGHT/TRIMARK)or a listed dealer that buys the order flow. Typical payment can be as high as 2cents a share, although these rates are getting squeezed lately.
Most of the listed trading occurs on a regional exchane(like the Philly or Chicago)which pay for the order flow.
bullandbear@xxxxxxxxx wrote:
> Hi There,
>
> I am not trading in stocks although i do have the series7 I am curious to know How does company like Etrade,datek and other internet trading houses say they can give you confirmation in 60 seconds or less,at a fee of about $8 per trade ........... Does the Etrade broker then contacts his "electronic clearing house"
> and places this order for the client? How does this system work?
>
> Is their an online clearing house that charges less than $8 per trade that was they can make a profit.
>
> I can't imagine Etrade those after recieving an order placing a call with their broker and he places the order on the floor.
>
> Thanks in advance
>
> Bryant
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