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> The difference is often less than a penny. But it adds up for larger trades. Schwab, for instance, says that for orders of 500 to 1,999 shares of S&P 500 comp

> The difference is often less than a penny. But it adds up for larger trades. Schwab, for instance, says that for orders of 500 to 1,999 shares of S&P 500 companies, the average savings from price improvement is $10.80. Ok and Schwab charges $4.95 for trades. So an investor ends up saving $5 per trade. S&P 500 companies stock price ranges from $20 to $1200 so to buy 500 shares of a company with $20 price per share would mean you spend $10000 resulting in a saving of 0.05%. On the other end of the spectrum you spend $600,000 resulting in a savings of 0.0008% assuming that when they say "average savings" they mean "average savings" per trade and not per share. Just to put the whole thing in perspective.

justinsaccount 8y ago
> average savings from price improvement is $10.80. I wonder if they lie about this like Fidelity does. If the market on some product is 100.00/100.06 with a mid price of 100.03, and I route an order at the mid price that is filled at 100.02 that is then a price improvement of 1 cent. On Fidelity I've noticed they calculate everything off the asking price, and would say my price improvement was .04, which is not really right.
- esoterica 8y ago
  Fidelity isn't lying. The price improvement IS .04, not .01. https://www.sec.gov/reportspubs/investor-publications/investorpubstradexechtm.html https://www.sec.gov/reportspubs/investor-publications/invest... > The opportunity for "price improvement" – which is the opportunity, but not the guarantee, for an order to be executed at a better price than what is currently quoted publicly It's measured with reference to the quote, not your order price. Think about it, if you sent a limit order for $20.02 and got filled at $10.02, did you get $10 of price improvement?
  - justinsaccount 8y ago
    > if you sent a limit order for $20.02 and got filled at $10.02, did you get $10 of price improvement? Yes. That's a rather extreme example, but If I route a limit order for X and get filled for Y, my price improvement is X-Y, not the asking price - X. I guess it depends on if you consider the price of something to be the mid price or the bid/ask price. As far as I am concerned Fidelity IS lying. The market on the thing could be 100.00/100.10, with a LAST trade price of 100.05. I route a limit order for 100.05 and get filled at 100.05 and fidelity claims I got price improved by 5 cents, which is bullshit. edit: also, that page you linked and quoted is specifically talking about market orders: > Here's an example of how price improvement can work: Let's say you enter a market order to sell 500 shares of a stock...

justinsaccount 8y ago

> average savings from price improvement is $10.80. I wonder if they lie about this like Fidelity does. If the market on some product is 100.00/100.06 with a mid price of 100.03, and I route an order at the mid price that is filled at 100.02 that is then a price improvement of 1 cent. On Fidelity I've noticed they calculate everything off the asking price, and would say my price improvement was .04, which is not really right.

esoterica 8y ago
Fidelity isn't lying. The price improvement IS .04, not .01. https://www.sec.gov/reportspubs/investor-publications/investorpubstradexechtm.html https://www.sec.gov/reportspubs/investor-publications/invest... > The opportunity for "price improvement" – which is the opportunity, but not the guarantee, for an order to be executed at a better price than what is currently quoted publicly It's measured with reference to the quote, not your order price. Think about it, if you sent a limit order for $20.02 and got filled at $10.02, did you get $10 of price improvement?
- justinsaccount 8y ago
  > if you sent a limit order for $20.02 and got filled at $10.02, did you get $10 of price improvement? Yes. That's a rather extreme example, but If I route a limit order for X and get filled for Y, my price improvement is X-Y, not the asking price - X. I guess it depends on if you consider the price of something to be the mid price or the bid/ask price. As far as I am concerned Fidelity IS lying. The market on the thing could be 100.00/100.10, with a LAST trade price of 100.05. I route a limit order for 100.05 and get filled at 100.05 and fidelity claims I got price improved by 5 cents, which is bullshit. edit: also, that page you linked and quoted is specifically talking about market orders: > Here's an example of how price improvement can work: Let's say you enter a market order to sell 500 shares of a stock...