AccessMyLibrary provides FREE access to millions of articles from top publications available through your library.
Byline: Ken Hoover
Investor's Business Daily
Do you think you get a great deal from your online broker? Are you happy he offers the lowest commissions in the known universe?
You may not be getting as good a deal as you think, because there are hidden costs you don't know about.
The Securities and Exchange Commission wants to fix this. If its proposed rule is adopted, your broker will have to give you details of any arrangements it has with market-makers who execut
e your orders.
And market-makers will also have to make public data disclosing how well they execute them.
The rule may help investors learn that the "cheapest" broker might not be.
Consider the effect of not getting the best price on a 1,000-share trade. If you pay just 1/16 extra, that amounts to $62.50. How does that compare with your e-broker's commission?
The rule revisits a controversial practice in the brokerage world: payment for order flow.