|
PureBytes Links
Trading Reference Links
|
----------
> From: Joe Frabosilio <joe6964@xxxxxxxx>
> To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
> Subject: Re: [Fwd: GEN: Stock brokerage]
> Date: Monday, January 19, 1998 5:10 PM
>
> nwinski wrote:
> >
> > Joe Frabosilio wrote:
> > >
> > > Subject: GEN: Stock brokerage
> > > Date: Sun, 18 Jan 1998 20:37:03 -0600
> > > From: Joe Frabosilio <joe6964@xxxxxxxx>
> > > To: realtradters@xxxxxxxxxxxxxx
> > >
> > > Hello Everyone,
> > >
> > > I just found out some news that might be of some interest. Web
Street
> > > Securities is offering no commission on Nasdaq stocks, note must
trade
> > > 1000 shares and must be $2.00 or more. They also offer Nasdaq level
> > > II. You just pay the exchange fee.
> > >
> > > I don't know about fills.
> > >
> > > Good Trading,
> > > Joe Frabosilio
> >
> > So given that they are not philanthrophists, how do they make their
> > living?
> >
> > Suspiciously,
> >
> > Norman
>
>
> This is just for Nasdaq stocks, if you don't trade 1000 shares or more
> its 14.95. For NYSE and AMEX its 14.95. If you would like you can call
> them at 1-800-web-trade 24 hours.
>
> Just to let everyone know I'm not trying to sell this brokerage, just
> saw something that might be of interest.
>
> Joe Frabosilio
Norman,
On NASDAQ stocks, the brokerage firm gets paid by the market makers for
order flow. The market makers pocket the spread and kick back a protion to
the brokerage firm. If this isn't illegal, it should be. But it is common
practice.
If the market maker grabs an eighth on each trade ($125 on 1000 share
lots), he would be more than glad to kick back $25 for the trade. A good
brokerage firm ought to be able to execute the trade for less than a buck.
Now, I'll bet some folks are really getting mad for paying 2% or more for
their trades --- each way.
With the advent of the personal computer, investors are increasingly
becoming more savvy. The days of the market makers are numbered.
Jack Hutchison
|