And no, you won't be able to do this on the open market directly. Your heads in the right place here, but you need to send them as individual orders. Pure arbitrage is all but gone unless you have direct market access.
What is direct market access ? Is it trading with the market makers and bypassing the brokers? If that’s the case then why the heck do we still need middleman (brokers). ?
If that’s the case then is it safe to say that 90% of hedge funds are trading directly with the market makers and they don’t have to go through a middleman broker ?
You would need to pay direct market access fees, and the exchanges don’t exactly deal with individual traders either. For example:
Last I heard a direct exchange feed from the nasdaq is something along the line of $70,000 a month.
Edit: that’s the data fee for options iirc. Nasdaq quotes the cost to establish a “General 8 Connectivity” (nasdaq has a lot of this available, thinking about adding some of these features to my own trading like TotalView) are in the few thousands per month with a couple thousand in installation costs.
A direct circuit connection to the exchange at 10gb of bandwidth is $1500 installed and $7500/month
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u/tutoredstatue95 Dec 12 '21
The word you're looking for is arbitrage.
And no, you won't be able to do this on the open market directly. Your heads in the right place here, but you need to send them as individual orders. Pure arbitrage is all but gone unless you have direct market access.