More Messages More Commission ???

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Imported from previous forum

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Hi all,

Here is one interesting scenario I have.

Let’s look at a specific example:

Order 1: BUY 100 IBM @ 200 – Fully Executed
Order 2: BUY 200 IBM @ 198 – Fully Executed

Here is how the user allocates:

Account % Shares AvgPrice
Account1 50 % 150 199
Account2 50% 150 199

Now lets say I send it down to a sell-side which supports only ONE ORDER per allocation message.

FIX Message 1:
Order1
Account 1 50 Shares @ 199
Account 2 50 Shares @ 199

FIX Message 2:
Order2
Account 1 100 Shares @ 199
Account 2 100 Shares @ 199

WILL COMMISSION BE ANY DIFFERENT IF I SEND IT IN A SINGLE MESSAGE (say to a broker who supports it).

I feel the commission charged in this case would be more than what it might be if I had sent down in a single message, Since a broker might apply a ‘Slab Rate’ to the underlying value and return the commission.

Is that the case ? Thanks.

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[ original email was from John Harris - john.harris@bondmart.com ]
This scenario is unlikely to create a commission problem. Generally, orders executed on the same side on the same day for the same security for the same account(s) will be bunched for commission purposes.

> Hi all,
>
> Here is one interesting scenario I have.
>
> Let’s look at a specific example:
>
> Order 1: BUY 100 IBM @ 200 – Fully Executed
> Order 2: BUY 200 IBM @ 198 – Fully Executed
>
> Here is how the user allocates:
>
> Account % Shares AvgPrice
> Account1 50 % 150 199
> Account2 50% 150 199
>
> Now lets say I send it down to a sell-side which supports only ONE ORDER per allocation message.
>
> FIX Message 1:
> Order1
> Account 1 50 Shares @ 199
> Account 2 50 Shares @ 199
>
> FIX Message 2:
> Order2
> Account 1 100 Shares @ 199
> Account 2 100 Shares @ 199
>
>
> WILL COMMISSION BE ANY DIFFERENT IF I SEND IT IN A SINGLE MESSAGE (say to a broker who supports it).
>
> I feel the commission charged in this case would be more than what it might be if I had sent down in a single message, Since a broker might apply a ‘Slab Rate’ to the underlying value and return the commission.
>
> Is that the case ? Thanks.
>
>
>
>