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Why should I care if a broker takes the other side of my trade?

Solution If you're investing in liquid stocks for the long-term, it may not matter much. However, if you are a short-term trader, do you really want a broker taking the other side of your trade -- even if they are given you the "current national best price", or even slightly better? Their goal is the exact same as yours - to make a short-term profit with as little risk as possible. And with their deep pockets, they'll likely be able to maneuver the markets with much greater ease. In fact, if you get scared out of your trade, who do you think just made a profit off of your loss (oh yes, PLUS the commission)! They likely sold the stock to you and bought it right back from you! So, why take the chance of competing with a market-maker who can directly watch your every move? Where possible, direct your short-term trading activities to brokers that always send your orders out to a public exchange.
 
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Article details
Article ID: 6
Category: tymoraPRO tradeSCAN
Date added: 2022-07-31 18:06:20
Views: 918
Rating (Votes): Article rated 3.3/5.0 (115)

 
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