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>RT’s,
> If I was a broker I would offer to a discount to people putting on
>spreads. (The prices in this next part apply more to futures brokers but
>the principle is the same.). I would give up a couple of bucks for the
>chance to get another $25 or whatever the commission is. I know that for
>orders of like 5 or more many firms will give you a discount for volume but
>I would want to encourage spread trades as much as possible. It just
>doesn’t figure to me. Any thoughts anyone.
>
>B.R.,
>Brent
Some brokers will give you a slight break on a spread order. And if you
chose to undo your spread on the exact same order in the future, the broker
would probably do fine.
Let's say you're going long bonds/short notes. Not much extra time or
trouble for your broker to put on that extra position. And if you exited
your position at the same time, there's not too much extra work involved
there.
BUT, you are perfectly entitled to exit your position in two orders. For
example, you may close your long bond and stay short notes (or vice versa).
The extra time and trouble to close your position on two separate occasions
makes it somewhat less worthwhile.
And by the same analysis, going net short or long five contracts may seem
like something you should get a major break on, but what if you close those
five contracts all at separate times?
The end result? If your business OVERALL produces enough revenue for your
broker, they'll give you a break. If not, they won't.
-Richard
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