It’s not that they’ll outsmart or outracing you with super fast computers. They get paid for just showing up to trade with you. And in many cases you are providing the money. It’s all part of a battle for market share, and it’s not just Canada. It goes on to other important markets like the U.S. and Britain. Under the trade price model that has become the norm in the stock trading world, known as “make or take” some traders and exchanges to pay rebates to others.
The markets offer discounts to dealers who are willing to post limit orders to withdraw. In essence, the markets have to pay to ensure their goods on the shelf in the form of offers and promotions. When someone comes in and takes the goods out of the box via a market order to buy or sell at the prevailing price, they pay a fee that is a bit higher than the discount. The stock market remains the difference. It is often the private investors who tell their brokers take me 100 shares of XYZ Co., which now trade on the side paying the charge. Very high frequency trading strategies have jumped to get to the other side of these transactions and to collect the.
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