I'm not familiar with IBKR's tools but market makers will make sure you're filled at the opening print if it's in their hands, either by posting it to an exchange, or taking it internally.comeinvest wrote: ↑Wed Jul 26, 2023 7:33 am Does this only apply at the level of each individual exchange or ECN (NYSE, Island, ...), or are brokers obliged to fill the order at the price of the opening auction? IBKR allows direct routing but can the brokers that don't allow direct routing route the order to a market maker, skipping the opening auction? If yes, it would be not much worth. IBKR charges ca. 0.67 cent commission per market order, which is more than the bid/ask spread at least for stocks with 1c tick size that typically have a 1c spread.
Search found 1069 matches
- Tue Sep 26, 2023 12:45 pm
- Forum: Investing - Theory, News & General
- Topic: Case study Broker trade executions
- Replies: 313
- Views: 51757
Re: Case study Broker trade executions
- Tue Sep 26, 2023 12:41 pm
- Forum: Investing - Theory, News & General
- Topic: Case study Broker trade executions
- Replies: 313
- Views: 51757
- Fri Sep 03, 2021 12:32 am
- Forum: Investing - Theory, News & General
- Topic: WSJ: Members Exchange Urges Regulators to Allow Half-Penny Stock Prices
- Replies: 23
- Views: 4221
Re: WSJ: Members Exchange Urges Regulators to Allow Half-Penny Stock Prices
Sadly, I except between the broker kickbacks and lucrative market makers deals of ripping off retail customers’ orders (via selective price “improvements”), all the financially interested parties (except retail, who pay the cost in poor execution prices and get no lobbying) will find a way to tank the proposal. Then again, anything that spins as “populist” could well get passed under this administration. BTW, I take great exception the notion that retail orders are getting ripped off. Far and away, they get better handling than any other type of class of order in the market. There's a reason there are "Retail Attestations" exist and allow price improvement systems that no other class of order gets. There is functionally no other ...
- Fri Sep 03, 2021 12:23 am
- Forum: Investing - Theory, News & General
- Topic: WSJ: Members Exchange Urges Regulators to Allow Half-Penny Stock Prices
- Replies: 23
- Views: 4221
Re: WSJ: Members Exchange Urges Regulators to Allow Half-Penny Stock Prices
Just sounds like there was market maker providing price improvement. The rounding you see is probably just a 2-digit display issue, probably not the actual price you bought at.sycamore wrote: ↑Wed Sep 01, 2021 4:11 pmThat might make sense but in my case I only bought one share. Maybe my broker bought that one share in multiple fractional parts? :)AnEngineer wrote: ↑Wed Sep 01, 2021 7:40 amIsn't this just averaging over all the shares in the trade? That is, some were at 174.87 and others at 174.86.
- Fri Sep 03, 2021 12:12 am
- Forum: Investing - Theory, News & General
- Topic: WSJ: Members Exchange Urges Regulators to Allow Half-Penny Stock Prices
- Replies: 23
- Views: 4221
Re: WSJ: Members Exchange Urges Regulators to Allow Half-Penny Stock Prices
A good question deserves a good answer, and I know you have the background to appreciate it. Let's not conflate banning PFOF which banning market maker internalization. They are separate concepts, and there is no need to tie them together. Your mechanisms talk about the results of prohibiting internalization. If anything, by itself, banning PFOF would put less on exchanges, because market markers wouldn't have to pay for the order flow, and have a larger profit cushion with which to absorb high-alpha trades. Citadel/Virtu would still get the trades because they can provide better price improvement than other market makers. Now they just wouldn't have to pay for the orders too. Also, I think you ignored the fact that 80-90% of orders get im...
- Wed Sep 01, 2021 12:21 am
- Forum: Investing - Theory, News & General
- Topic: WSJ: Members Exchange Urges Regulators to Allow Half-Penny Stock Prices
- Replies: 23
- Views: 4221
Re: WSJ: Members Exchange Urges Regulators to Allow Half-Penny Stock Prices
That PFOF ban would be great for the market and the retail customers, making the spreads way way tighter than they are now and the markets much for efficient, all-in trading costs lower, etc. I'm curious how you think the mechanics of a PFOF ban would decrease spreads. Over half of all notional traded is currently done at 1-penny spreads, the minimum. Yes, there is "selective" price improvement, but market makers provide PI on generally 80-90% of retail flow coming to them, often >25% of the spread. This is a significantly better price than the client could achieve in the market. PI is a 605 metric on how market makers compete for flow, and it's a highly-competitive, low-margin business. If you want tighter spreads, simply advoca...
- Tue Aug 31, 2021 8:15 pm
- Forum: Investing - Theory, News & General
- Topic: WSJ: Members Exchange Urges Regulators to Allow Half-Penny Stock Prices
- Replies: 23
- Views: 4221
Re: WSJ: Members Exchange Urges Regulators to Allow Half-Penny Stock Prices
No-one cannot submit limit orders at sub-penny prices (above $1). The thousands-of-a-dollar situation is because your broker is deciding to give you price improvement at their discretion. However, there is the concept of midpoint peg orders -- there's no reason that brokers couldn't offer it. Except the big reason of payment for order flow.
- Sun Jan 24, 2021 11:28 am
- Forum: Investing - Theory, News & General
- Topic: Vanguard 2-factor authentication becoming mandatory and available for non-US
- Replies: 104
- Views: 26315
Re: Vanguard 2-factor authentication becoming mandatory and available for non-US
I have read using google voice was great security. If that is the case, why would companies block their use? If the security is so good, one would think companies would embrace google voice. Yes, GV is more secure. However, companies don't know it's GV -- they just know it's not registered as a mobile number, and so it gets lumped in with the ban. Bureaucracies, particularly in finance, like Vanguard, will tend to go for simple answers will take the easy decision to just ban them to get less risk or complication. Finance is always the worst at security. Remember all the sites that would block your browser from autofilling passwords or allow you to paste into the password field? Completely anti-security measures. Also, Vanguard's passwords ...
- Fri Jan 22, 2021 8:44 pm
- Forum: Investing - Theory, News & General
- Topic: Vanguard 2-factor authentication becoming mandatory and available for non-US
- Replies: 104
- Views: 26315
Re: Vanguard 2-factor authentication becoming mandatory and available for non-US
Ugh, I really hope they haven't disabled support for GV. Banks will sometimes block it because of concerns of people fraud from VOIP. Ally and Venmo block GV. It's really hit and miss.stocknoob4111 wrote: ↑Fri Jan 22, 2021 8:36 pmI was using my Google Voice number until now but in the last few days it has just stopped working or works intermittently, not sure what happened.
- Tue May 05, 2020 10:20 pm
- Forum: Investing - Theory, News & General
- Topic: Vanguard 2-factor authentication becoming mandatory and available for non-US
- Replies: 104
- Views: 26315
Re: Vanguard 2-factor authentication becoming mandatory and available for non-US
I consider accessing a financial institution via their app to be *more* secure than using their website, especially on an iPhone. You can't get phished, the OS guarantees all communications are encrypted, no risk of rogue browser extensions stealing data. There are other nuanced considerations. For example, I use a password manager for every account I have. Using Firefox's built-in password manager, I'm guaranteed I only submit the password to the correct site. Using a password manager with mobile apps generally requires a cumbersome and insecure process of using an independent password manger to copy a password to the clipboard and then paste into the app. Any app can read from the clipboard during this time. On Android there are keyboard...
- Sun May 03, 2020 2:08 am
- Forum: Investing - Theory, News & General
- Topic: Vanguard 2-factor authentication becoming mandatory and available for non-US
- Replies: 104
- Views: 26315
Re: Vanguard 2-factor authentication becoming mandatory and available for non-US
Unfortunately, for Fidelity, if you enable app TOTP 2FA, you have to use it on each login. If you simply use SMS-based 2FA, you can choose to enter it only when logging in from new devices. While I strongly prefer TOTP 2FA, I don't want to have to enter it all the time. Poor (lack of) design decision on their part, IMO.
- Fri May 01, 2020 10:45 pm
- Forum: Investing - Theory, News & General
- Topic: Vanguard 2-factor authentication becoming mandatory and available for non-US
- Replies: 104
- Views: 26315
Re: Vanguard 2-factor authentication becoming mandatory and available for non-US
Venmo also has this problem, and Facebook did too at one point. From what I've noticed, these providers are using a service that classify GV numbers as landlines, which would suggest they can't receive SMS.
- Sun Mar 15, 2020 12:13 am
- Forum: Investing - Theory, News & General
- Topic: Have any of you ever bought VIX calls/puts?
- Replies: 20
- Views: 1399
Re: Have any of you ever bought VIX calls/puts?
I love your metaphor!Crushtheturtle wrote: ↑Sat Mar 14, 2020 6:31 pm Playing with Options is playing with fire.
VIX options is juggling the fire. Different rules than other underlyings.
Understand what you are doing.
- Fri Feb 14, 2020 10:15 pm
- Forum: Investing - Theory, News & General
- Topic: Fidelity lets clients now trade fractional shares of stocks and ETFs
- Replies: 209
- Views: 27020
Re: Fidelity lets clients now trade fractional shares of stocks and ETFs
That's great if brokers can keep cost down and provide that functionality. Generally there is much more liquidity near at EOD, so there's more liquidity to hedge with during that time (fractional shares necessitate that the broker act as the counterparty, and they'll hedge it away).
- Fri Feb 14, 2020 12:00 pm
- Forum: Investing - Theory, News & General
- Topic: Fidelity lets clients now trade fractional shares of stocks and ETFs
- Replies: 209
- Views: 27020
Re: Fidelity lets clients now trade fractional shares of stocks and ETFs
I think I asked earlier in the thread, but how would folks expect this to work? Would they limit it to Market or Limit on Open (MOO or LOO) or Market or Limit on Close (MOC or LOC) orders? Would they give you a choice between the two? Or would you be able to specify a time for your order? Would they limit automatic investment to the most liquid ETFs where there would never be a risk of a failed opening or closing auction or where they could pool purchases (as with dividend reinvestments)? There are enough complications to consider with automatic ETF investments to make me believe it will be a while. I certainly wouldn't expect to see it from a major brokerage this year. I can pretty much guarantee they'd be MOC or VWAP orders, for a slew o...
- Fri Jan 10, 2020 12:17 am
- Forum: Investing - Theory, News & General
- Topic: Why don’t ETF shares ever split to reduce price?
- Replies: 29
- Views: 4300
- Thu Jan 09, 2020 9:26 pm
- Forum: Investing - Theory, News & General
- Topic: Why don’t ETF shares ever split to reduce price?
- Replies: 29
- Views: 4300
Re: Why don’t ETF shares ever split to reduce price?
The goal is not to have a lot of buyers, but to have a lot of AUM. AUM is gotten from appealing to big players, not retail clients purchasing only a few thousand dollars.
- Wed Jan 08, 2020 4:04 pm
- Forum: Investing - Theory, News & General
- Topic: Why don’t ETF shares ever split to reduce price?
- Replies: 29
- Views: 4300
Re: Why don’t ETF shares ever split to reduce price?
Leveraged ETFs appeal to different clients than most ETFs, mainly to intra-day traders who might need smaller increments to hedge with.
- Wed Jan 08, 2020 1:51 am
- Forum: Investing - Theory, News & General
- Topic: Why don’t ETF shares ever split to reduce price?
- Replies: 29
- Views: 4300
Re: Why don’t ETF shares ever split to reduce price?
This is highly untrue. There are no fractional purchases, just fractional ownership. Transactions only work in whole shares. What bookkeeping brokers do to allow you to own fractional shares is one thing, but trading only occurs in integers.
- Wed Jan 08, 2020 12:24 am
- Forum: Investing - Theory, News & General
- Topic: Why don’t ETF shares ever split to reduce price?
- Replies: 29
- Views: 4300
Re: Why don’t ETF shares ever split to reduce price?
Purchasing higher-dollar ETFs is more efficient because the spread is a smaller percentage of the price (among other things I won't get into).
Consider the extreme example of a $1/share stock. The minimum spread, $0.01, is 1% of the stock's price. It's assumed that on average you pay half the spread when transacting, so you'd be paying 0.5% of the stock to purchase it. For a $100/share stock, the minimum spread is 0.01% of the price, so you're paying 0.005% of the stock price to purchase it.
Consider the extreme example of a $1/share stock. The minimum spread, $0.01, is 1% of the stock's price. It's assumed that on average you pay half the spread when transacting, so you'd be paying 0.5% of the stock to purchase it. For a $100/share stock, the minimum spread is 0.01% of the price, so you're paying 0.005% of the stock price to purchase it.
- Sat Jan 04, 2020 3:38 am
- Forum: Investing - Theory, News & General
- Topic: Do you prefer etfs or mutual funds?
- Replies: 271
- Views: 18729
Re: Vanguard phasing out regular mutual fund shares?
"guaranteeing a NAV execution" has a fairly precise meaning. "close" is certainly not "guaranteeing".
I'll just link something Rick Ferri's wrote a while ago: Solving The Bond ETF Discount Problem .
- Thu Jan 02, 2020 2:31 pm
- Forum: Investing - Theory, News & General
- Topic: Vanguard Continues to Lower the Cost of Investing with Expansion of Commission-Free Platform Beyond ETF
- Replies: 71
- Views: 6652
Re: Vanguard Continues to Lower the Cost of Investing with Expansion of Commission-Free Platform Beyond ETF
There is a way to make money if you're getting better-than-midpoint executions, but you and Vanguard would eventually get slapped, as the executing broker would not be happy.
- Thu Jan 02, 2020 3:05 am
- Forum: Investing - Theory, News & General
- Topic: Do you prefer etfs or mutual funds?
- Replies: 271
- Views: 18729
Re: Vanguard phasing out regular mutual fund shares?
I do not have any experience with ETF's but curious if we have the same problem with mutual funds? When I place an order for a mutual fund in the morning I have no idea what the closing price will be when its executed. Is this similar? Thanks The problem does not exist for mutual funds: while you do not know the price, you cannot overpay, because you are guaranteed fund calculated NAV (though sometimes calculating NAV can be problematic for illiquids, but that's another story). With ETFs you are never guaranteed such a NAV execution (though some venues have considered having a closing-NAV based execution; I don't think they gained traction). For index funds you've effectively you've done the equivalent of participating in the closing cross...
- Tue Dec 31, 2019 10:33 pm
- Forum: Investing - Theory, News & General
- Topic: Do you prefer etfs or mutual funds?
- Replies: 271
- Views: 18729
Re: Vanguard phasing out regular mutual fund shares?
Not outside of market hours, which is what I was originally responding to.Workable Goblin wrote: ↑Tue Dec 31, 2019 1:52 pm But I see several methods of defining reasonable prices in most circumstances looking at previous executions and/or the actual value of the underlying assets the ETF holds.
I don't see much value in responding any more. You may take my advice or leave it.
- Tue Dec 31, 2019 12:51 pm
- Forum: Investing - Theory, News & General
- Topic: Do you prefer etfs or mutual funds?
- Replies: 271
- Views: 18729
Re: Vanguard phasing out regular mutual fund shares?
I think you're thinking of ETNs, which are Exchange Trades Notes, and only a contract with the provider.Johnnie wrote: ↑Tue Dec 31, 2019 12:10 pm I once posted a thread asking whether ETFs actually owned the shares, or were they just "contracts" with counterparties that mimic owning shares. The term is "synthetic" I learned there. Everyone insisted the ETFs, really do own the shares, but late in the thread someone pointed to some that are indeed "synthetic."
ETFs are the same structure as mutual funds underneath. I might be mistaken, but I think they actually classify as mutual funds, just additionally able to be traded on exchanges.
- Tue Dec 31, 2019 12:08 pm
- Forum: Investing - Theory, News & General
- Topic: Do you prefer etfs or mutual funds?
- Replies: 271
- Views: 18729
Re: Vanguard phasing out regular mutual fund shares?
My understanding is that trading out of market hours is bad because prices tend to go wonky at market open due to the time it takes for trading to get started and all of the various after-hours actions that have taken place. But if you use a limit order to set a rationally set price above which you will not buy then it seems to me that this problem is greatly reduced or erased, certainly for someone who is planning on holding for ten or twenty years and doesn't need the best possible price from their holdings the way an active trader would. How did you "rationally" set this limit order price? You have no reference points that are valid outside of market hours. As a retail trader, your reference points should be the prevailing mar...
- Tue Dec 31, 2019 12:26 am
- Forum: Investing - Theory, News & General
- Topic: Why fidelity mutual funds such as ffopx declined more than 10% today?
- Replies: 24
- Views: 4631
- Mon Dec 30, 2019 11:57 pm
- Forum: Investing - Theory, News & General
- Topic: Do you prefer etfs or mutual funds?
- Replies: 271
- Views: 18729
Re: Vanguard phasing out regular mutual fund shares?
What you're saying doesn't make any sense to me. I place an order to buy a share of an ETF at less than NAV. By definition I won't buy any shares of that ETF unless they're being offered for less than NAV. How could I regret that? Especially given I'm a Boglehead who's going to be holding onto that share for ten or twenty years anyway? My initial response was to someone saying they were placing orders outside of market hours. I said that was ill-advised. You had said, in response to me: I imagine that’s what the limit order is for? My point was that having your order be a limit order is irrelevant to the concept of the ill-advisement of placing outside of market hours. You have no idea of the market conditions your order will execute in, e...
- Sun Dec 29, 2019 10:51 pm
- Forum: Investing - Theory, News & General
- Topic: Case study Broker trade executions
- Replies: 313
- Views: 51757
Re: Case study Broker trade executions
Market makers can play shenanigans so that the limit order is less likely to execute, and become posted, therefore earning them a rebate instead of having to pay PI.Startled Cat wrote: ↑Sun Dec 29, 2019 4:33 pm but neither can I think of any incentive to give one type of order more price improvement than the other.
- Sun Dec 29, 2019 10:46 pm
- Forum: Investing - Theory, News & General
- Topic: Do you prefer etfs or mutual funds?
- Replies: 271
- Views: 18729
Re: Vanguard phasing out regular mutual fund shares?
I imagine that’s what the limit order is for? If you set the limit at NAV or recent trading values I can’t see why you should have much regret over how much you paid. Limit order or not is irrevelant. In general, non-marketable limit order posted at the inside, especially from retail clients, get run over and execute at poor PWP 10 prices (Price Weighted Participation 10%) , almost by definition. A market order will actually generally do better because of price improvement provided by the broker (of course, sent during market hours). No trader who wants to make money does it with irregard to current trading conditions. You said you posted outside of market hours, so it'd become a DAY order the next session. You have no idea what the openin...
- Sun Dec 29, 2019 2:46 pm
- Forum: Investing - Theory, News & General
- Topic: Do you prefer etfs or mutual funds?
- Replies: 271
- Views: 18729
Re: Vanguard phasing out regular mutual fund shares?
I put limit orders in on the weekend. They are good for up to 60 days I believe. My objective is to buy x shares of an etf as long as it's not greater than y price (so I don't get whacked if there is a temporary jump in price.) I don't watch it during the day although I do get an email from vanguard when the order fills. If you are trying to time the purchase hour by hour, than vanguard is not the platform for you. Your timing approach is generally not advised. Ideally one trades in the mid to late half of the day, when liquidity is stable. Orders placed outside of market hours could execute during illiquid times at (future-looking) poor prices. Background: 15 years of market making and buy-side order flow analysis. My ideal non-informed t...
- Wed Nov 20, 2019 2:22 am
- Forum: Investing - Theory, News & General
- Topic: What "Exactly" Does Selling Order Flow Mean?
- Replies: 31
- Views: 4020
Re: What "Exactly" Does Selling Order Flow Mean?
If a market maker is paying for flow, that's money it can't use for price improvement on orders.AlohaJoe wrote: ↑Tue Nov 19, 2019 11:23 pmThere is no profit given up at all. All brokers are required by SEC regulation to adhere to NBBO -- National Best Bid and Offer.fallingeggs wrote: ↑Tue Nov 19, 2019 9:49 pm It’s one of those things that are tiny for any individual investor (the profit given up is pennies on a trade, so who’s going to raise a big stink?)
- Fri Nov 08, 2019 10:33 pm
- Forum: Investing - Theory, News & General
- Topic: [Deleted] [Re: (NEW) WisdomTree 90/60 U.S. Balanced Fund]
- Replies: 652
- Views: 85784
Re: (NEW) WisdomTree 90/60 U.S. Balanced Fund
Any broker would love to take your non-marketable limit order. They just send your order to an exchange, and pick up the rebate when it fills. There is absolutely no risk on their part.
One reason why some brokers don't want to take marketable orders in certain instruments is because they will generally need to provide price improvement for marketable order. There's a greater chance of them getting gamed and losing money if they're having to provide that improvement in those instruments. In contrast, a broker is not going to get gamed from you trading SPY in retail-sized amounts.
One reason why some brokers don't want to take marketable orders in certain instruments is because they will generally need to provide price improvement for marketable order. There's a greater chance of them getting gamed and losing money if they're having to provide that improvement in those instruments. In contrast, a broker is not going to get gamed from you trading SPY in retail-sized amounts.
- Tue Oct 15, 2019 3:15 pm
- Forum: Investing - Theory, News & General
- Topic: Case study Broker trade executions
- Replies: 313
- Views: 51757
Re: Case study Broker trade executions
If you're setting your buy limit price at the prevailing bid (or sell at the offer), it's not the broker who is getting you the fill. Your order will have just been posted on an exchange. Your order just sits there. To get your execution, someone selling is crossing the spread to sell.
And more than likely, if you post at the bid, and you end up getting filled, it's because the market is moving down, and what you executed at is the new offer. In other words, you bought high, and the market is now low.
In general, it's highly to your advantage to buy at the current offer, due to the price improvement you'll get.
And more than likely, if you post at the bid, and you end up getting filled, it's because the market is moving down, and what you executed at is the new offer. In other words, you bought high, and the market is now low.
In general, it's highly to your advantage to buy at the current offer, due to the price improvement you'll get.
- Tue Sep 10, 2019 2:56 pm
- Forum: Investing - Theory, News & General
- Topic: New Vanguard Security Code Requirement [2FA: Two-factor authentication]
- Replies: 204
- Views: 28434
Re: New Vanguard Security Code Requirement [2FA: Two-factor authentication]
It can be costly for the provider to support people losing their 2FA method and needing a way to get back in, especially in such a highly regulated industry. If Vanguard was innovative, however, they could have more stringent restrictions on actions taken while logged in with the "backup" method, like no bank transfers.ThereAreNoGurus wrote: ↑Mon Sep 09, 2019 10:44 pm These things just reinforce the notion that maybe Vanguard's security options are a bit behind the competition's.
- Fri May 17, 2019 1:01 am
- Forum: Investing - Theory, News & General
- Topic: Will ETFs Replace Traditional Funds
- Replies: 87
- Views: 6505
Re: Will ETFs Replace Traditional Funds
You want it for free, which is totally understandable! (Well, you can get it for free at M1Finance so maybe it is more like "I want it free at the brokerage I'm already using!" which is also understandable; though by not switching to M1Finance we're all sending a signal to Vanguard & Fidelity that we don't really care about it that much.) My point is that there is absolutely zero technical reason ETFs can't do all that today -- because it is already being done today. It is just that brokerages have realised they can create another revenue stream and are charging money for it right now. It isn't some fundamental difference between ETFs and mutual funds, though. Thanks for the clarification. While it's not a "fundamental&q...
- Thu May 16, 2019 11:24 pm
- Forum: Investing - Theory, News & General
- Topic: Will ETFs Replace Traditional Funds
- Replies: 87
- Views: 6505
Re: Will ETFs Replace Traditional Funds
Fidelity doesn't allow fractional share purchases, never mind denominating the request in dollars: "Quantity must be a positive whole number" (I have to specify shares). TD Ameritrade is the same, not letting me enter fractional share buys (request is still in shares).
I want to be able to say "I want to buy $500" of VTI and have it done with me not even present during market hours.
- Thu May 16, 2019 6:51 pm
- Forum: Investing - Theory, News & General
- Topic: Will ETFs Replace Traditional Funds
- Replies: 87
- Views: 6505
Re: Will ETFs Replace Traditional Funds
Now if they can just come up with a trivial way at the brokerage to execute a "Market on Close" order that simulates a daily mutual fund purchase and the convenience advantage of the mutual fund goes away and no would really care. Actually, I would recommend that the way to go is not market-on-close orders, but full-day VWAP orders. The more you spread the demand over time, the less impact you'll have. Brokers could aggregate and net demand from their client-base as well, making the process more efficient. This is also often similar to how dividends are re-invested. As other posters have noted, a key feature of working with mutual funds is that you transact in dollars instead of shares. If brokerages came up with better tools to ...
- Wed Mar 27, 2019 7:11 am
- Forum: Investing - Theory, News & General
- Topic: American Funds readily available with no loads
- Replies: 30
- Views: 3165
Re: American Funds readily available with no loads
Can you help explain why all of your posts are about promoting this fund provider?
- Wed Mar 20, 2019 1:23 pm
- Forum: Investing - Theory, News & General
- Topic: Vanguard ETFs, Are fractional shares allowed?
- Replies: 29
- Views: 10938
Re: Vanguard ETFs, Are fractional shares allowed?
Fractional shares are never traded on an exchange. The fraction is managed by the booking process of a broker. Think of the broker as holding 3 shares of something, but collectively owned by 3 brokerage clients. That's why it only occurs with dividends -- a bunch of clients all get dividends at the same time, and the brokerage goes out and buys on their behalf, splitting the proceeds.TropikThunder wrote: ↑Wed Mar 20, 2019 1:06 pm I am thinking more of the mechanics of how the actual trade is processed on the exchange. Since you buy ETFs on the market from other sellers, not from a mutual fund company, I just wonder how they end up transacting the fractional shares. If I want $200 of VTI, that’s about a share and a half. How do they enter a buy order for half of a share?
- Mon Mar 11, 2019 11:47 pm
- Forum: Investing - Theory, News & General
- Topic: Large Lump Sum ($1M) into an ETF at Once
- Replies: 37
- Views: 4360
Re: Large Lump Sum ($1M) into an ETF at Once
Never, ever use AON orders. Pretty much the most game-able order you can enter.BrandonBogle wrote: ↑Mon Mar 11, 2019 10:14 pm Does Fidelity offer an option to buy such as this if you are concerned about having many lots for the purchase (and potentially a price change between them) vs. one?
- Thu Feb 14, 2019 1:07 pm
- Forum: Investing - Theory, News & General
- Topic: Case study Broker trade executions
- Replies: 313
- Views: 51757
Re: Case study Broker trade executions
Often times calculations will ignore oddlots. Was your execution >= 100 shares?livesoft wrote: ↑Thu Feb 14, 2019 10:24 am I submitted a limit order to sell VSS this morning in a Vanguard account. It was executed at 101.33 which is reflected in the chart above. But the "Day's Range" at finance.yahoo.com shows high so far was 101.29. (And yes, Vanguard says the trade executed at the time shown on the chart.)
Morningstar.com, Vanguard.com, and TDAmeritrade have the Day's high as 101.33.
- Sun Feb 10, 2019 5:32 am
- Forum: Investing - Theory, News & General
- Topic: Tax efficient and FDIC insured
- Replies: 11
- Views: 1473
Re: Tax efficient and FDIC insured
While not technically FDIC insured, savings bonds are have effectively the same amount of protection, and are tax efficient in that the they are tax-deferred until redemption.
- Thu Jan 10, 2019 8:00 pm
- Forum: Investing - Theory, News & General
- Topic: [Vanguard to stop accepting purchases in Leveraged or Inverse mutual funds]
- Replies: 145
- Views: 14234
Re: [Vanguard to stop accepting purchases in Leveraged or Inverse mutual funds]
Market makers pay for order flow. Source: thirteen years of algo work for a market maker.alex_686 wrote: ↑Thu Jan 10, 2019 2:00 pm Some exchanges pay for order flow. But that is the exchange, not the market maker. The market makers don't have have that power, all they can do is widen the bid/ask spread to handle their expenses.
Where are you getting this from? I used to do operational stuff and this seems way off base - but it has been a few years.
- Thu Jan 10, 2019 12:40 am
- Forum: Investing - Theory, News & General
- Topic: [Vanguard to stop accepting purchases in Leveraged or Inverse mutual funds]
- Replies: 145
- Views: 14234
Re: [Vanguard to stop accepting purchases in Leveraged or Inverse mutual funds]
One reason why a low-cost platform like Vanguard might want to ban trading in certain products is because they need to send the orders to a market maker for handling. That market maker doesn't want to handle toxic flow because it costs them money, and part of their agreement with Vanguard is likely that in order to provide good price improvement, the flow coming in needs to be retail-ish. The inverse/leveraged products are the opposite of being retail. This is not the answers, for a couple of reasons. First, all trades flow through market makers. For illiquid things this mean a large bid/ask spread. This is born by the investor, not the broker. Next, the broker must make reasonable efforts for best execution. If the spread is large, it is ...
- Wed Jan 09, 2019 12:15 pm
- Forum: Investing - Theory, News & General
- Topic: [Vanguard to stop accepting purchases in Leveraged or Inverse mutual funds]
- Replies: 145
- Views: 14234
Re: [Vanguard to stop accepting purchases in Leveraged or Inverse mutual funds]
One reason why a low-cost platform like Vanguard might want to ban trading in certain products is because they need to send the orders to a market maker for handling. That market maker doesn't want to handle toxic flow because it costs them money, and part of their agreement with Vanguard is likely that in order to provide good price improvement, the flow coming in needs to be retail-ish. The inverse/leveraged products are the opposite of being retail.
- Thu Jan 03, 2019 7:56 pm
- Forum: Investing - Theory, News & General
- Topic: Case study Broker trade executions
- Replies: 313
- Views: 51757
Re: Case study Broker trade executions
Generally not. Usually the broker is going to give significant price improvement. There is extreme competition at this level. Many times when I've bought an oddlot I've paid the bid price.
- Thu Jan 03, 2019 11:22 am
- Forum: Investing - Theory, News & General
- Topic: Vanguard To Liquidate Convertible Securities Fund
- Replies: 25
- Views: 3113
Re: Vanguard To Liquidate Convertible Securities Fund
I think you'll see the difficulty once you start trying to put convertibles into "risk on" or "risk off" buckets.
- Sat Nov 03, 2018 4:16 am
- Forum: Investing - Theory, News & General
- Topic: Vanguard to offer non-Vanguard ETFs commission-free
- Replies: 245
- Views: 32055
Re: Vanguard to offer non-Vanguard ETFs commission-free
Sellers pay the fee.walletless wrote: ↑Sat Nov 03, 2018 12:57 am Somehow I've never paid such a fee when trading vanguard ETF in vanguard.com
- Wed Sep 12, 2018 9:32 pm
- Forum: Investing - Theory, News & General
- Topic: Robinhood Is Making Millions Selling Out Their Millennial Customers To High-Frequency Traders
- Replies: 20
- Views: 8154
Re: Robinhood Is Making Millions Selling Out Their Millennial Customers To High-Frequency Traders
If they are allowing information leakage they would likely be violating securities regulations. They are probably being payed more than other brokers because their users/toolset likely make the trades less capable of timing the market well.