Rebate TradingRebate Trading is a technique of day trading and profiting in stock market. Here instead of trader paying the commission for buying and selling, he is being paid by the service provider. ECN rebate is the primary source of profit.In 1998, an electronic communication network (ECN), a type of computer system that facilitates the trading of financial products, outside of stock exchanges, came into existence as an Alternative Trading Networks. Primarily stocks and currencies are traded here. They increase competition among the trading firms, by providing lower transaction costs, transparency of order books, extended trading services beyond exchange trading hours. These electronic communication networks, charge commission to the traders. But they pay commission to the market makers, for creating liquidity. These market makers, make money by trading low priced, high volume stocks. So they trade more number of shares, with the available capital. They limit their risk by continuously squaring their position and creating new position. This increases liquidity and facilitates the functioning of ECNs. Click here to go from Rebate Trading to Types of Stock Trading. Click here to go back to Home. | Privacy Policy | Disclaimer | |
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