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payment for order flow???

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Tallahassee
 
 
Posts: 1 since Dec 2018
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payment for order flow real answer


a lil background. trading for 15 years. series 3 licensed broker for 10 years. branch manager futures trading prop firm for 2 years before going independent.

1. asking a broker about order flow and routing is nit smart. brokers are motivated by making money off of you. especially when they start an answer with..im not legally allowed to comment. nothing against this broker or others but here is a fun exercise if you trade futures live.
call your broker. even if discount. say. hey i want to know when i click the mouse on my dom and place a mkt order in the emini.be specific! what exactly happens as far as routing? broker will immediately take defensive. well..it goes to globex trade engine..say ok but exactly how does it get there step by step? his voice will crack..he will say..you click.the order comes here and is checked for risk then it is sent to globex thru your trade system (front end). say..ok but how does my front end get it to the exchange? wait for it...well u need to call the frontvend company...say does my fcm have a connection to the exchange..he will say im not sure. lie. then say ok i will call fcm. fcm will freak out more because they cannot believe how smart you are getting! you are getting warmer. fcm will say no we do not have a connection directly to globex. if truthful. they will say call your broker. at this point they will say..what us your account number? who is this? trust me they are all against you gor the kickbacks! eventually you will find out that 70% if fcms and 90% of mainly retail fcms use CQGs direct connection to the exchange. cqg has api that most fcms make it look like its an internal program but no.its cqg. oec trader is cqg api. so truthfully your order goes to cqg then pushed to the convenuence gateway at the cme..then to the market segment gateway then it finally makes it to the trade matching engine. before all that you have lots of internet hops and skips and multiple api to connect to etc. to answer your question properly you almost need a court order and you should get the real answer. optimus probably uses oec trader or an inhouse front end that just uses CQGs api and then routes to the exchange. ONLY a direct connection goes straight to the trade engine if choice. there are 17 engines at the cme product specific.
lastly. you do not need an ib to trade. you can go directly thru an fcm. trade fees are negotiable based on volume. personally having a broker can be a very good asset if he is honest and has time for you. yes along the way someone somewhere an a.i. machine sees your orders. thats why you trade with stops wide enough so the prop desk at wedbusch executing doesnt move the mkt a few ticks to pick you off with some wash trades. be smart question everything. make the calls force the answers!! you are paying lots of money to get answers. good luck!

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