Exchange & Routing Fees / Rebates
Electronic communication networks (ECNs) and alternative trading systems (ATSs) charge a fee to all market participants who use their networks.
We pass through ECN fees and rebates.
Adding Liquidity / Non-Marketable Orders
Adding Liquidity orders are buy/sell limit orders in which the limit price below/above the current market and they are not immediately executable. The order sits on an ECN's order book until the market moves to that price, at which point the order executes.
- For a Adding Liquidity buy limit order, the limit price is below the Ask.
- For a Adding Liquidity sell limit order, the limit price is above the Bid.
Example for Adding Liquidity:
The inside market in AAPL is $651.01 X $651.09. If you place a buy order at $651.08 or below, the order will sit on the order book until another market participant is willing to sell at that price. Alternately, you can place a sell order at $651.02 or higher and your order will sit on the order book until another market participant is willing to buy at that price. Buying on the bid and selling at the offer is referred to as adding liquidity.
Removing Liquidity / Marketable Orders
Removing Liquidity orders are either market orders, OR buy/sell limit orders whose limit is at a price which is immediately executable. A BUY order is sent with a price equal to or higher than the current offer and a SELL orders is priced equal to or lower than the current bid.
- For a Removing Liquidity buy limit order, the limit price is at or above the Ask.
- For a Removing Liquidity sell limit order, the limit price is at or below the Bid.
Example for Removing Liquidity:
Using the example from above, the inside market in BAC is $12.03 X $12.04. If you place a buy order at $12.04 or higher you will immediately execute at the current offer. If you place a sell order at $12.03 or lower you will immediately execute on the current bid. Buying at the offer or selling on the bid is referred to as removing liquidity. (Keep in mind that some ECNs can have hidden orders. Executions against existing hidden orders are still considered removing liquidity).
Example for Outbound Routing:
You send an order to NSDQ to buy AMZN at $242.36 while BATS ECN is displaying an offer to sell at $242.31. NSDQ will route your order to BATS for execution at the better/improved price ($242.31). This order routing is referred to as outbound.
SEC & Regulatory Fees
|STC: (SEC Transaction Fee)||($0.0000224)
X value of sell
|Multiply this amount by the principal amount sold. ($22.40 per million dollar).|
|FINRA TAF (Trading Activity Fee)||($0.000119)
X number of shares
|Covers sales of exchange registered securities whenever executed. Multiply this amount by the number of shares sold|
|ORF Fee (Options Regulatory Fee)||($0.0257)
X number of contracts
|Per U.S. exchange listed option contract|
- Example: Selling 100 shares of a U.S. stock at $29 (100 x $29 = $2,900) will incur a SEC fee of USD $0.065 (0.0000224 x $2,900).