Why Prop Traders Need Control of Orders

In this complex and often predatory market environment, it is of the utmost importance to have control of your orders.  With Payment for Order Flow arrangements, and Maker-Taker allowing multiple market participants to piggy back off your order and capture profits that could be yours, you need to know how to survive and thrive in the current market structure.

For the retail customers that are trading just a few times per month, the amounts made from front running your order is negligible.  But to the HFT firms doing this with thousands of accounts every day it adds up to millions of dollars.  

To the trader with larger accounts trading 50,000+ shares per month, these amounts will add up very quickly.

You need to have greater control over your orders so that you capture extra profit per trade, rather than have your orders sold to someone else.

How to Take Control of Your Orders

The availability of order types that allow you to go directly to dark pools, combined with an increased knowledge of the market, is necessary to enhance your order options and trading experience.  It is also necessary to have experience and resources to place orders at the midpoint of the NBBO, and to capture rebates when adding liquidity to the market.  

Great Point Capital has the resources and the availability of order types, combined with an increased knowledge of the market to maximize your trading returns.  

Rather than selling your orders, we help you to direct your orders to the venue that gives you the best outcome.

Great Point Capital Provides the Tools for Trading Success

Great Point Capital offers modern technology with Takion Software and IT support, beneficial order types, capital, stock loans, flexibility and payouts with benefits.

Technology

Great Point Capital utilizes Takion Software, the most modern trading platform that meets the needs of active traders.  Takion is selective in providing their software to only experienced trading firms.  We employ skilled traders to take full advantage of all capabilities that Takion has to offer.  

Order Type Availability

We offer access to the most beneficial order types, including order types to go directly to dark pools, to place orders at the midpoint of the NBBO, and capture rebates when adding liquidity.

Capital

Great Point Capital gives you the resources to benefit the most from your trading, providing one of the largest capital bases among prop trading firms.  We give you additional leverage that you would not otherwise have, and provide excellent opportunities to earn maximum returns on your trades, without being limited to your personal resources.   

Flexible Location

You can have the flexibility to trade remotely with internet access, or in our offices in Chicago or Austin.  You can trade by hand or develop an automated strategy, the choice is yours.

Stock Loan Accessibility

Great Point Capital partners with firms that specialize in finding difficult-to-borrow names, giving you a wide selection of stocks to trade.

Benefits and Payouts

Registered prop traders with Great Point Capital have access to our group health plan, and enjoy aggressive payouts.

With the multitude of choices available to traders today for routing your orders, it is challenging to know exactly how to take control of your orders.  Great Point Capital has the experience, , capital, technology, and the order types to provide the most beneficial environment for you to take control of your orders and net bigger returns.   

Great Point Capital has been serving the trading community since 2001.  Our 100+ prop traders actively trade the firm’s capital, specializing in equities and equity options.  We are one of the select few firms that can offer access to Takion Software, enhancing your trading performance.  For control of your orders and to earn to your maximum potential, contact us today to speak with one of our knowledgeable staff.  

Who Profits on Your Stock Orders?

Third party firms that are paying for orders under a Payment for Order Flow (POF) agreement do not enter into those arrangements to lose money, they are making money as well as the broker they are paying.  Reg NMS says that your broker needs to provide you with the best execution available at the time.  So how can two firms, your broker and the third-party firm paying for POF, manage to profit from your order, while still giving you to best possible price?

Maker Taker

One instance where two firms can profit from your order is when they are getting paid for the liquidity you provide.  If your order is not marketable immediately, they send it to the venue that will pay the most for adding liquidity.

For example, providing liquidity on ARCA for a 1000-share order results in a rebate of about $3.00 that goes to the POF firm who paid your broker for the order.

HFT

The other instance is that the POF firm used your order as part of a profitable trading strategy.

For instance, in heavily traded stocks, a good amount of trading is done at the midpoint of the NBBO (National Best Bid and Offer).  

If the market is 30.24x30.25, and you send your order to buy 1000 shares at 30.25, the POF firm sells you the stock at 30.25 (usually 30.24999, which allows them to jump in front of everyone at 30.25), then they sweep through the dark pools and midpoints on exchanges and buy the stock at 30.245.  This nets a profit of about .005/share, or $5.00, on your order.

The POF firm may also be aware that the market is just about ready to turn and go to 30.23x30.24. They know this through their sophisticated predictive algorithms based on trades and changes in quote sizes, combined with the direct market feeds that are faster than the feeds creating the NBBO.

The faster direct feeds might show the market is already at 30.23x30.24, but the NBBO won’t show that for few milliseconds.  This makes it easier – they can give you the “best execution” available on the current official source, the NBBO, at 30.25, then turn around and immediately buy the stock back at 30.24, which became the true offer in the market.

It is vitally important for traders to have control of their orders.  The amounts made from these orders is negligible for the retail customer that is only trading a couple times per month, but to the HFT firm doing this across thousands of accounts every day it adds up to millions of dollars.  

Contact Great Point Capital today to take control of your orders and seize additional profits per trade.  We have the knowledge of the market, the experience and resources to assist you in routing your orders so that it is most profitable to you.  

If you need a broker with capital, and access to orders including those in dark pools, contact us today to see how we can work together to realize your true trading potential.  

Learn more about Great Point Capital today.  Our 100+ prop traders actively trade the firm’s capital, increasing their leverage and returns.   We are one of the select few firms able to offer access to Takion Software Platform, enhancing your trading performance.  To take control of your orders and to capture additional profits, contact Great Point Capital today.

How to Maximize Your Profit on Your Stock Orders

Great Point Capital has discussed Payment for Order Flow (POF) and how High Frequency Trading (HFT) firms profit on your trades.   We’ve shared how Maker-Taker affects the way that market participants execute trades.  Now we would like to show you what you can do to improve your trading returns within this complex and often predatory environment.

Order Routing Options Limited with Traditional Broker

If you are currently trading through a traditional retail broker, you probably have a limited number of ways for routing your order, if any.     Routing your order is typically limited to a “smart” route, or perhaps a preference for NSDQ or ARCA.  Some of the more advanced firms might let you choose IEX.  These limited choices will not help much, as you do not see the pricing difference between the selections, and you cannot change them easily if something changes in the market.

Traders use “smart” routes, which are simply computerized algorithms that aid traders in buying or selling stock, with the main goal of making the search for liquidity easier.  Smart routes are not a trading system, but are instead a set of instructions that are based on certain conditions set by the trader, and are customized by the trader or pre-set by the broker or software.  Thus, they are limited by the broker, or the software.  In addition to limitation on orders, a trader’s ability to post bids and offers through ECNs is also limited to which venues your broker has subscriptions to use.  

Most retail brokers have agreements in place with third party firms where they get paid for sending orders to them for execution.  This is the obviously the “smart” route if it is one of your choices.  In the past, brokers had networks of people who would work together to execute your order.  Your commission paid for that network and the cost to execute your order.  Today, executing your order is no longer an expense for your broker, but has become a profit center.  

Who Profits on Your Order?

The third-party firms that are paying for orders under a Payment for Order Flow arrangement obviously aren’t losing money on the transactions either, they are making money as well as the broker.  Reg NMS states that your broker has to to provide you with the best execution available at the time.  So how is it that two firms manage to profit from your order, while still giving you to best possible price?

To take control of your orders and recognize additional profits per trade, contact Great Point Capital today.  We have the experience, and the resources to help you route your orders so that it is most beneficial to you.  

Great Point Capital has been serving the trading community for almost two decades.  Our 100+ prop traders actively trade the firm’s capital, specializing in equities and equity options.  We are one of the very few firms able to offer access to Takion Software Platform, enhancing your trading performance.  For control of your orders and to capture additional profits, contact Great Point Capital today.