Q&A  |  JAN 2011

Q&A by Don Bright

Don, I have a question about order routing that perhaps you can help me with. I trade with a respectable brokerage that caters to active traders. I’ve noticed in the last few months that I have been charged fees referring to “routing,” “rerouting,” and electronic communications networks (Ecn) fees. I place my orders to go to the Nyse, as suggested by my peers. I am told that there may be fees for taking of liquidity, and also that I may be entitled to collect rebates for providing of liquidity. I’m not sure what any of this means, but now that I’m being charged fees, I would like to understand it better. When I called the broker, they were very vague about it all, as if they weren’t sure either, but assured me that they were pass-through fees, not add-ons. Can you help? — oldtimeguy

by Don Bright