1.3
E*TRADE Securities
2022
4
2023-02-03T18:24:10Z
2022
10
99.37
52.32
5.78
29.03
12.88
CITADEL SECURITIES LLC
29.60
36.17
32.91
15.31
33.57
364647.90
20.0000
63067.01
20.0001
66545.04
30.8258
95861.13
20.5629
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Citadel Securities LLC (“Citadel”) to facilitate liquidity provision and price improvement opportunities for its customers. Citadel generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Citadel in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Citadel for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Citadel to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Citadel whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Citadel do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Citadel.
There is a potential conflict to a market maker such as Citadel both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Citadel can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Citadel’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Citadel.
In addition to revenues that Citadel may collect for executing or facilitating the execution of E*TRADE customer orders, Citadel also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Citadel to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Citadel’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Citadel receives for executions of E*TRADE customer orders, although Citadel could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Virtu Americas, LLC
24.16
26.24
23.97
19.71
25.83
271365.28
20.0000
44442.45
17.0851
56556.76
25.3930
57613.27
10.2352
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Virtu Americas, LLC (“Virtu”) to facilitate liquidity provision and price improvement opportunities for its customers. Virtu generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Virtu in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Virtu for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Virtu to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Virtu whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Virtu do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Virtu.
There is a potential conflict to a market maker such as Virtu both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Virtu can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Virtu’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Virtu.
In addition to revenues that Virtu may collect for executing or facilitating the execution of E*TRADE customer orders, Virtu also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Virtu to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Virtu’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Virtu receives for executions of E*TRADE customer orders, although Virtu could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
G1 Execution Services, LLC
23.86
19.23
21.95
33.27
22.35
189018.06
19.6369
39413.47
19.6580
114615.16
29.7222
64961.57
22.0507
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to G1 Execution Services, LLC (“G1X”) to facilitate liquidity provision and price improvement opportunities for its customers. G1X generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from G1X in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from G1X for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow G1X to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with G1X whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and G1X do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to G1X.
There is a potential conflict to a market maker such as G1X both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as G1X can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as G1X’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to G1X.
In addition to revenues that G1X may collect for executing or facilitating the execution of E*TRADE customer orders, G1X also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize G1X to route higher percentages of E*TRADE customer orders to particular venues over others, subject to G1X’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates G1X receives for executions of E*TRADE customer orders, although G1X could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Jane Street Capital
9.94
13.95
12.83
2.71
8.63
148799.49
20.0042
27168.73
20.0000
11251.54
30.7092
27830.68
20.1742
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Jane Street Capital (“Jane Street”) to facilitate liquidity provision and price improvement opportunities for its customers. Jane Street generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Jane Street in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Jane Street for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Jane Street to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Jane Street whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Jane Street do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Jane Street.
There is a potential conflict to a market maker such as Jane Street both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Jane Street can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Jane Street’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Jane Street.
In addition to revenues that Jane Street may collect for executing or facilitating the execution of E*TRADE customer orders, Jane Street also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Jane Street to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Jane Street’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Jane Street receives for executions of E*TRADE customer orders, although Jane Street could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both
Two Sigma Securities, LLC
5.32
2.17
3.71
12.05
3.62
19124.17
19.0958
6582.20
17.5321
59243.25
28.8896
14559.48
24.8969
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Two Sigma Securities, LLC (“Two Sigma”) to facilitate liquidity provision and price improvement opportunities for its customers. Two Sigma generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Two Sigma in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Two Sigma for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Two Sigma to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Two Sigma whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Two Sigma do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Two Sigma.
There is a potential conflict to a market maker such as Two Sigma both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Two Sigma can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Two Sigma’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Two Sigma.
In addition to revenues that Two Sigma may collect for executing or facilitating the execution of E*TRADE customer orders, Two Sigma also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Two Sigma to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Two Sigma’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Two Sigma receives for executions of E*TRADE customer orders, although Two Sigma could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
UBS Securities, LLC
3.65
2.22
3.50
6.09
3.99
16911.62
19.9599
8264.36
20.3246
23332.13
29.8291
12424.33
23.0711
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to UBS Securities, LLC (“UBS”) to facilitate liquidity provision and price improvement opportunities for its customers. UBS generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from UBS in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from UBS for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow UBS to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with UBS whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and UBS do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to UBS.
There is a potential conflict to a market maker such as UBS both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as UBS can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as UBS’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to UBS.
In addition to revenues that UBS may collect for executing or facilitating the execution of E*TRADE customer orders, UBS also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize UBS to route higher percentages of E*TRADE customer orders to particular venues over others, subject to UBS’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates UBS receives for executions of E*TRADE customer orders, although UBS could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
The Nasdaq Stock Market
1.60
0.00
0.44
5.10
0.72
0.00
0.0000
-1681.58
-29.0332
21634.24
32.4067
-423.29
-11.8336
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to the Nasdaq Stock Market (“NASDAQ”) to facilitate liquidity provision and price improvement opportunities for its customers, as specified in the above Public Order Routing Report statistics. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under NASDAQ’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because NASDAQ offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to NASDAQ rather than another venue in order to reach a higher tier. E*TRADE and NASDAQ do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the NASDAQ Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to NASDAQ.
The fees E*TRADE pays and rebates E*TRADE receives from NASDAQ for NMS equity executions are determined based on NASDAQ’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by NASDAQ in the NASDAQ Fees Schedule, available at http://www.nasdaqtrader.com/trader.aspx?id=bx_pricing. Please note that NASDAQ’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, NASDAQ paid E*TRADE standard rebate rates of $0.00325 per share for executions priced at $1.00 per share or more and did not pay any per share amount for executions priced below $1.00 per share. Executions that removed liquidity from NASDAQ qualified for tiered pricing and E*TRADE was charged fees of $0.003 per share for executions priced at $1.00 per share or more and 0.30% of the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from NASDAQ in the amount of $86,501 in October, $89,596 in November, and $84,613 in December.
E*TRADE also participates in NASDAQ’s retail order priority program under which eligible retail orders receive priority ahead of other available interest at a given price level or other enhanced execution benefits. E*TRADE reviews customers’ activity on a periodic basis to determine program eligibility and reserves the right to choose whether to participate in the NASDAQ retail order priority program. E*TRADE is an affiliated company of Morgan Stanley & Co. LLC (“MS&Co”), which is a market maker on NASDAQ and may realize profits from orders it routes to NASDAQ for execution. E*TRADE may share indirectly in such profits generated by MS&Co as a result of the corporate affiliation between MS&Co and E*TRADE. E*TRADE and MS&Co order execution volumes are combined on a monthly basis for tiered pricing program incentive purposes. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
Cboe EDGX Exchange, Inc.
1.56
0.00
0.57
4.79
1.08
0.00
0.0000
-528.87
-12.9173
27712.44
31.2291
0.00
0.0000
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to the Cboe EDGX Exchange, Inc. (“EDGX”) to facilitate liquidity provision and price improvement opportunities for its customers, as specified in the above Public Order Routing Report statistics. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under EDGX’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because EDGX offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to EDGX rather than another venue in order to reach a higher tier. E*TRADE and EDGX do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the EDGX Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to EDGX.
The fees E*TRADE pays and rebates E*TRADE receives from EDGX for NMS equity executions are determined based on EDGX’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by EDGX in the EDGX Fees Schedule, available at http://www.cboe.com/us/equities/membership/fee_schedule/edgx/. Please note that EDGX’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, EDGX paid E*TRADE standard rebate rates of $0.0032 per share for executions priced at $1.00 per share or more and $0.00003 for executions priced below $1.00 per share. Executions that removed liquidity from EDGX qualified for tiered pricing and E*TRADE was not charged a per share fee for executions priced at $1.00 per share or more or charged a per share fee of the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from EDGX in the amount of $107,417 in October, $132,800 in November, and $115,288 in December.
E*TRADE also participates in EDGX’s retail order priority program under which eligible retail orders receive priority ahead of other available interest at a given price level or other enhanced execution benefits. E*TRADE reviews customers’ activity on a periodic basis to determine program eligibility and reserves the right to choose whether to participate in the EDGX’s retail order priority program. E*TRADE is an affiliated company of Morgan Stanley & Co. LLC (“Morgan Stanley”), which is a market maker on EDGX and may realize profits from orders it routes to EDGX for execution. E*TRADE may share indirectly in such profits generated by MS&Co as a result of the corporate affiliation between MS&Co and E*TRADE. E*TRADE and MS&Co order execution volumes are combined on a monthly basis for tiered pricing program incentive purposes. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
Members Exchange (MEMX)
0.31
0.00
0.12
0.96
0.22
0.00
0.0000
-199.69
-18.0052
5480.70
35.0000
795.78
32.5923
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to MEMX LLC (“MEMX”) as specified in the above Public Order Routing Report disclosures. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under MEMX’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because MEMX offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to MEMX rather than another venue in order to reach a higher tier. E*TRADE and MEMX do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the MEMX Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to MEMX.
The fees E*TRADE pays and rebates E*TRADE receives from MEMX for NMS equity executions are determined based on MEMX’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by MEMX in the MEMX Fees Schedule, available at http://info.memxtrading.com/fee-schedule/. Please note that MEMX’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, MEMX paid E*TRADE standard rebate rates of $0.0035 per share for executions priced at $1.00 per share or more and 0.05% of the total trade notional value for executions priced below $1.00 per share. On executions that removed liquidity from MEMX qualified for tiered pricing, E*TRADE was not charged a per share fee for executions priced at $1.00 per share or more nor charged a per share fee for the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from MEMX in the amount of $26,766 in October, $24,122 in November, and $25,656 in December.
E*TRADE is an affiliated company of Strategic Investments I, Inc., both of which are wholly owned subsidiaries of Morgan Stanley and investor-shareholders of MEMX. Accordingly, E*TRADE, both directly and indirectly through its parent company Morgan Stanley and/or its affiliates may share in profits realized by MEMX, which could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to MEMX over other execution venues. Additionally, E*TRADE is an affiliated company of Morgan Stanley & Co., LLC (“MS&Co”), which is market maker on MEMX and may realize profits from orders it routes to MEMX for execution. E*TRADE may share directly or indirectly in any such profits generated by MS&Co. E*TRADE orders routed to MEMX through MS&Co will be combined with any other order flow that MS&Co routes to MEMX for the purpose of determining the applicable pricing under MEMX’s tiered pricing model described above. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
99.34
44.28
10.80
34.27
10.65
CITADEL SECURITIES LLC
28.50
36.07
34.01
15.63
32.83
1129187.71
16.9211
469323.72
8.3190
265319.75
19.2640
217072.11
17.1232
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Citadel Securities LLC (“Citadel”) to facilitate liquidity provision and price improvement opportunities for its customers. Citadel generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Citadel in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Citadel for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Citadel to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Citadel whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Citadel do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Citadel.
There is a potential conflict to a market maker such as Citadel both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Citadel can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Citadel’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Citadel.
In addition to revenues that Citadel may collect for executing or facilitating the execution of E*TRADE customer orders, Citadel also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Citadel to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Citadel’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Citadel receives for executions of E*TRADE customer orders, although Citadel could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
G1 Execution Services, LLC
24.17
18.90
20.89
32.40
22.93
589496.52
16.7001
265692.97
8.6760
473525.20
21.4637
152356.62
19.5002
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to G1 Execution Services, LLC (“G1X”) to facilitate liquidity provision and price improvement opportunities for its customers. G1X generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from G1X in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from G1X for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow G1X to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with G1X whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and G1X do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to G1X.
There is a potential conflict to a market maker such as G1X both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as G1X can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as G1X’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to G1X.
In addition to revenues that G1X may collect for executing or facilitating the execution of E*TRADE customer orders, G1X also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize G1X to route higher percentages of E*TRADE customer orders to particular venues over others, subject to G1X’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates G1X receives for executions of E*TRADE customer orders, although G1X could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Virtu Americas, LLC
23.56
26.36
24.07
19.11
25.72
854424.46
16.7660
307326.95
7.9443
203199.98
17.4251
120668.51
4.0856
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Virtu Americas, LLC (“Virtu”) to facilitate liquidity provision and price improvement opportunities for its customers. Virtu generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Virtu in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Virtu for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Virtu to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Virtu whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Virtu do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Virtu.
There is a potential conflict to a market maker such as Virtu both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Virtu can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Virtu’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Virtu.
In addition to revenues that Virtu may collect for executing or facilitating the execution of E*TRADE customer orders, Virtu also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Virtu to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Virtu’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Virtu receives for executions of E*TRADE customer orders, although Virtu could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Jane Street Capital
9.47
14.17
13.39
2.76
7.54
467014.53
16.7496
185351.25
8.2603
38953.60
19.4513
54162.51
17.4672
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Jane Street Capital (“Jane Street”) to facilitate liquidity provision and price improvement opportunities for its customers. Jane Street generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Jane Street in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Jane Street for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Jane Street to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Jane Street whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Jane Street do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Jane Street.
There is a potential conflict to a market maker such as Jane Street both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Jane Street can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Jane Street’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Jane Street.
In addition to revenues that Jane Street may collect for executing or facilitating the execution of E*TRADE customer orders, Jane Street also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Jane Street to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Jane Street’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Jane Street receives for executions of E*TRADE customer orders, although Jane Street could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Two Sigma Securities, LLC
6.06
2.23
3.49
12.39
4.18
63221.51
16.2846
47678.45
7.6022
219915.37
16.5816
31194.85
22.4971
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Two Sigma Securities, LLC (“Two Sigma”) to facilitate liquidity provision and price improvement opportunities for its customers. Two Sigma generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Two Sigma in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Two Sigma for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Two Sigma to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Two Sigma whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Two Sigma do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Two Sigma.
There is a potential conflict to a market maker such as Two Sigma both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Two Sigma can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Two Sigma’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Two Sigma.
In addition to revenues that Two Sigma may collect for executing or facilitating the execution of E*TRADE customer orders, Two Sigma also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Two Sigma to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Two Sigma’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Two Sigma receives for executions of E*TRADE customer orders, although Two Sigma could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
UBS Securities, LLC
4.05
2.26
3.07
6.57
4.39
52843.44
16.9116
42328.24
11.3181
82863.42
20.3125
29466.12
17.8318
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to UBS Securities, LLC (“UBS”) to facilitate liquidity provision and price improvement opportunities for its customers. UBS generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from UBS in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from UBS for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow UBS to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with UBS whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and UBS do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to UBS.
There is a potential conflict to a market maker such as UBS both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as UBS can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as UBS’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to UBS.
In addition to revenues that UBS may collect for executing or facilitating the execution of E*TRADE customer orders, UBS also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize UBS to route higher percentages of E*TRADE customer orders to particular venues over others, subject to UBS’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates UBS receives for executions of E*TRADE customer orders, although UBS could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Cboe EDGX Exchange, Inc.
1.94
0.00
0.55
5.09
1.27
0.00
0.0000
-5275.76
-10.4557
86122.66
20.9944
0.00
0.0000
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to the Cboe EDGX Exchange, Inc. (“EDGX”) to facilitate liquidity provision and price improvement opportunities for its customers, as specified in the above Public Order Routing Report statistics. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under EDGX’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because EDGX offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to EDGX rather than another venue in order to reach a higher tier. E*TRADE and EDGX do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the EDGX Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to EDGX.
The fees E*TRADE pays and rebates E*TRADE receives from EDGX for NMS equity executions are determined based on EDGX’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by EDGX in the EDGX Fees Schedule, available at http://www.cboe.com/us/equities/membership/fee_schedule/edgx/. Please note that EDGX’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, EDGX paid E*TRADE standard rebate rates of $0.0032 per share for executions priced at $1.00 per share or more and $0.00003 for executions priced below $1.00 per share. Executions that removed liquidity from EDGX qualified for tiered pricing and E*TRADE was not charged a per share fee for executions priced at $1.00 per share or more or charged a per share fee of the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from EDGX in the amount of $107,417 in October, $132,800 in November, and $115,288 in December.
E*TRADE also participates in EDGX’s retail order priority program under which eligible retail orders receive priority ahead of other available interest at a given price level or other enhanced execution benefits. E*TRADE reviews customers’ activity on a periodic basis to determine program eligibility and reserves the right to choose whether to participate in the EDGX’s retail order priority program. E*TRADE is an affiliated company of Morgan Stanley & Co. LLC (“Morgan Stanley”), which is a market maker on EDGX and may realize profits from orders it routes to EDGX for execution. E*TRADE may share indirectly in such profits generated by MS&Co as a result of the corporate affiliation between MS&Co and E*TRADE. E*TRADE and MS&Co order execution volumes are combined on a monthly basis for tiered pricing program incentive purposes. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
The Nasdaq Stock Market
1.88
0.00
0.44
5.07
0.90
0.00
0.0000
-11416.92
-23.8076
72700.93
22.7708
-4370.27
-14.2934
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to the Nasdaq Stock Market (“NASDAQ”) to facilitate liquidity provision and price improvement opportunities for its customers, as specified in the above Public Order Routing Report statistics. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under NASDAQ’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because NASDAQ offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to NASDAQ rather than another venue in order to reach a higher tier. E*TRADE and NASDAQ do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the NASDAQ Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to NASDAQ.
The fees E*TRADE pays and rebates E*TRADE receives from NASDAQ for NMS equity executions are determined based on NASDAQ’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by NASDAQ in the NASDAQ Fees Schedule, available at http://www.nasdaqtrader.com/trader.aspx?id=bx_pricing. Please note that NASDAQ’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, NASDAQ paid E*TRADE standard rebate rates of $0.00325 per share for executions priced at $1.00 per share or more and did not pay any per share amount for executions priced below $1.00 per share. Executions that removed liquidity from NASDAQ qualified for tiered pricing and E*TRADE was charged fees of $0.003 per share for executions priced at $1.00 per share or more and 0.30% of the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from NASDAQ in the amount of $86,501 in October, $89,596 in November, and $84,613 in December.
E*TRADE also participates in NASDAQ’s retail order priority program under which eligible retail orders receive priority ahead of other available interest at a given price level or other enhanced execution benefits. E*TRADE reviews customers’ activity on a periodic basis to determine program eligibility and reserves the right to choose whether to participate in the NASDAQ retail order priority program. E*TRADE is an affiliated company of Morgan Stanley & Co. LLC (“MS&Co”), which is a market maker on NASDAQ and may realize profits from orders it routes to NASDAQ for execution. E*TRADE may share indirectly in such profits generated by MS&Co as a result of the corporate affiliation between MS&Co and E*TRADE. E*TRADE and MS&Co order execution volumes are combined on a monthly basis for tiered pricing program incentive purposes. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
Members Exchange (MEMX)
0.37
0.00
0.10
0.97
0.25
0.00
0.0000
-1440.48
-12.3089
21044.42
26.9553
1196.16
31.3368
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to MEMX LLC (“MEMX”) as specified in the above Public Order Routing Report disclosures. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under MEMX’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because MEMX offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to MEMX rather than another venue in order to reach a higher tier. E*TRADE and MEMX do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the MEMX Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to MEMX.
The fees E*TRADE pays and rebates E*TRADE receives from MEMX for NMS equity executions are determined based on MEMX’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by MEMX in the MEMX Fees Schedule, available at http://info.memxtrading.com/fee-schedule/. Please note that MEMX’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, MEMX paid E*TRADE standard rebate rates of $0.0035 per share for executions priced at $1.00 per share or more and 0.05% of the total trade notional value for executions priced below $1.00 per share. On executions that removed liquidity from MEMX qualified for tiered pricing, E*TRADE was not charged a per share fee for executions priced at $1.00 per share or more nor charged a per share fee for the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from MEMX in the amount of $26,766 in October, $24,122 in November, and $25,656 in December.
E*TRADE is an affiliated company of Strategic Investments I, Inc., both of which are wholly owned subsidiaries of Morgan Stanley and investor-shareholders of MEMX. Accordingly, E*TRADE, both directly and indirectly through its parent company Morgan Stanley and/or its affiliates may share in profits realized by MEMX, which could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to MEMX over other execution venues. Additionally, E*TRADE is an affiliated company of Morgan Stanley & Co., LLC (“MS&Co”), which is market maker on MEMX and may realize profits from orders it routes to MEMX for execution. E*TRADE may share directly or indirectly in any such profits generated by MS&Co. E*TRADE orders routed to MEMX through MS&Co will be combined with any other order flow that MS&Co routes to MEMX for the purpose of determining the applicable pricing under MEMX’s tiered pricing model described above. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
99.97
18.85
7.91
33.69
39.54
CITADEL SECURITIES LLC
36.45
40.59
39.62
40.30
30.57
2748018.66
46.4947
2317248.86
46.3200
1670730.82
44.6249
1081312.96
37.0116
E*TRADE Securities LLC (“E*TRADE”) routes U.S.-listed options orders to Citadel Securities LLC (“Citadel”) to facilitate liquidity provision and price improvement opportunities for its customers. Citadel generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Citadel in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.48 per contract for simple and complex equity options orders. E*TRADE does not receive remuneration from Citadel for index options executions or for Professional Customer orders, which are orders of customers who submit an average of 390 options orders per trading day, per calendar month, on a quarterly basis. E*TRADE routes U.S.-listed options orders only (except as indicated in the next sentence) to market makers that pay for customer order flow (and all such market makers pay substantially the same rates). As an exception to the foregoing sentence, E*TRADE routes a limited number of orders to its affiliate, Morgan Stanley & Co. LLC (“MS&Co”), from which E*TRADE does not accept payment. E*TRADE and Citadel do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Citadel.
In general, public, retail, or non-professional index options order execution fees range from $0.00 to $1.32 per contract, depending on the index option class and premium price, with Citadel passing exchange fees for index option executions back to E*TRADE each month. For Q4 2022, E*TRADE paid total fees on customer index options executions of $336,405 in October, $304,046 in November, and $297,288 in December.
There is a potential conflict to an options market maker such as Citadel both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the options market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, an options market maker such as Citadel can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. An options market maker’s (such as Citadel’s) anticipated profit must be allocated among these three sub-categories, such that an increased allocation to any one sub-category will result in a decreased allocation to one or more of the other categories, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by market maker competition for order flow (as measured by the amount of price improvement provided), under the same general payment for order flow terms applicable to Citadel.
In addition to revenues that Citadel may collect for executing or facilitating the execution of E*TRADE customer orders, Citadel may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize Citadel to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Citadel’s independent order routing and best execution obligation. Exchange rebates provided to Citadel for E*TRADE customer order executions by the U.S. options exchanges are not passed through to E*TRADE or its customers although Citadel’s receipt of such rebates could potentially be used to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both. Citadel does not pass through the fees that it is charged by the U.S. options exchanges for E*TRADE customer options order executions, other than the index options fees described above.
Wolverine Execution Services, LLC
23.72
20.74
21.29
21.38
27.62
1343512.80
48.4532
980407.00
47.4937
1061181.79
48.2335
1691575.06
49.1028
E*TRADE Securities LLC (“E*TRADE”) routes U.S.-listed options orders to Wolverine Execution Services, LLC (“Wolverine”) to facilitate liquidity provision and price improvement opportunities for its customers. Wolverine generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Wolverine in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.48 per contract for simple and complex equity options orders. E*TRADE does not receive remuneration from Wolverine for index options executions or for Professional Customer orders, which are orders of customers who submit an average of 390 options orders per trading day, per calendar month, on a quarterly basis. E*TRADE only routes U.S.-listed options orders to market makers that pay for customer order flow, and all such market makers are subject to substantially the same rate of payment, apart from a limited number of orders, which E*TRADE routes to its affiliate Morgan Stanley & Co., LLC (“MS&Co”), from which E*TRADE does not accept payment. E*TRADE and Wolverine do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Wolverine.
In general, public, retail, or non-professional index options order execution fees range from $0.00 to $1.32 per contract, depending on the index option class and premium price, with Wolverine passing exchange fees for index option executions back to E*TRADE each month. For Q4 2022, E*TRADE paid total fees on customer index options executions of $1,002,668 in October, $924,456 in November, and $897,898 in December.
There is a potential conflict to an options market maker such as Wolverine both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the options market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, an options market maker such as Wolverine can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. An options market maker’s (such as Wolverine’s) anticipated profit must be allocated among these three sub-categories, such that an increased allocation to any one sub-category will result in a decreased allocation to one or more of the other categories, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by market maker competition for order flow (as measured by the amount of price improvement provided), under the same general payment for order flow terms applicable to Wolverine.
In addition to revenues that Wolverine may collect for executing or facilitating the execution of E*TRADE customer orders, Wolverine may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize Wolverine to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Wolverine’s independent order routing and best execution obligation. Exchange rebates provided to Wolverine for E*TRADE customer order executions by the U.S. options exchanges are not passed through to E*TRADE or its customers although Wolverine’s receipt of such rebates could potentially be used to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both. Wolverine does not pass through the fees that it is charged by the U.S. options exchanges for E*TRADE customer options order executions, other than the index options fees described above.
Global Execution Brokers LP
19.39
23.63
23.28
23.36
13.21
1597983.60
46.6076
1108781.88
46.0655
1127585.28
45.5451
517577.81
32.6731
E*TRADE Securities LLC (“E*TRADE”) routes U.S.-listed options orders to Global Execution Brokers LP (“G1X”) to facilitate liquidity provision and price improvement opportunities for its customers. G1X generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from G1X in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.48 per contract for simple and complex equity options orders. E*TRADE does not receive remuneration from G1X for index options executions or for Professional Customer orders, which are orders of customers who submit an average of 390 options orders per trading day, per calendar month, on a quarterly basis. E*TRADE only routes U.S.-listed options orders to market makers that pay for customer order flow, and all such market makers are subject to substantially the same rate of payment, apart from a limited number of orders, which E*TRADE routes to its affiliate Morgan Stanley & Co., LLC (“MS&Co”), from which E*TRADE does not accept payment. E*TRADE and G1X do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to G1X.
In general, public, retail, or non-professional index options order execution fees range from $0.00 to $1.32 per contract, depending on the index option class and premium price, with G1X passing exchange fees for index option executions back to E*TRADE each month. For Q4 2022, E*TRADE paid total fees on customer index options executions of $201,391 in October, $169,759 in November, and $174,665 in December.
There is a potential conflict to an options market maker such as G1X both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the options market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, an options market maker such as G1X can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. An options market maker’s (such as G1X’s) anticipated profit must be allocated among these three sub-categories, such that an increased allocation to any one sub-category will result in a decreased allocation to one or more of the other categories, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by market maker competition for order flow (as measured by the amount of price improvement provided), under the same general payment for order flow terms applicable to G1X.
In addition to revenues that G1X may collect for executing or facilitating the execution of E*TRADE customer orders, G1X may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize G1X to route higher percentages of E*TRADE customer orders to particular venues over others, subject to G1X’s independent order routing and best execution obligation. Exchange rebates provided to G1X for E*TRADE customer order executions by the U.S. options exchanges are not passed through to E*TRADE or its customers although G1X’s receipt of such rebates could potentially be used to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both. G1X does not pass through the fees that it is charged by the U.S. options exchanges for E*TRADE customer options order executions, other than the index options fees described above.
Dash/IMC Financial Markets
13.47
6.42
6.70
6.78
23.88
318407.62
36.5386
195686.50
33.6846
182677.38
28.1152
1016671.26
30.9857
E*TRADE Securities LLC (“E*TRADE”) routes U.S.-listed options orders to Dash Financial Technologies, LLC (“Dash”) to facilitate liquidity provision and price improvement opportunities for its customers. Dash generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Dash (based upon the remuneration Dash receives from the liquidity providers with which it has arrangements as described below) (i.e. payment for order flow) in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.48 per contract for simple and complex equity options orders. E*TRADE does not receive remuneration from Dash for index options executions or for Professional Customer orders, which are orders of customers who submit an average of 390 options orders per trading day, per calendar month, on a quarterly basis. E*TRADE only routes U.S.-listed options orders to market makers that pay for customer order flow, and all such market makers are subject to substantially the same rate of payment, apart from a limited number of orders, which E*TRADE routes to its affiliate Morgan Stanley & Co., LLC (“MS&Co”), from which E*TRADE does not accept payment. E*TRADE and Dash do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Dash.
In general, public, retail, or non-professional index options order execution fees range from $0.00 to $1.32 per contract depending on the index option class and premium price, with Dash passing exchange fees for index option executions to E*TRADE each month. For Q4 2022, E*TRADE paid total fees on customer index option executions of $441,171 in October, $597,955 in November, and $570,683 in December.
In connection with Dash ’s handling of E*TRADE retail equity option orders, Dash has arrangements with multiple, unaffiliated liquidity providers, including IMC Financial Markets, designed to facilitate liquidity provision and price improvement opportunities. Pursuant to these arrangements, Dash routes E*TRADE retail equity options orders to exchanges and may preference the liquidity providers on such applicable exchange, consistent with exchange-sponsored programs which are described in the fee schedules of each such options exchange. The liquidity providers provide Dash with remuneration in connection with Dash ’s routing of E*TRADE retail equity options orders, including through reciprocal order flow arrangements between Dash and such liquidity provider and/or payment per contract to Dash in return for E*TRADE retail equity options orders that Dash routes or directs. Dash provides payment to E*TRADE as described above based upon the compensation Dash receives from such liquidity providers.
There is a potential conflict to Dash and/or the liquidity provider to which Dash routes orders both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the liquidity provider seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, the liquidity provider can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay Dash (and for Dash, in turn, to pay E*TRADE) for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. The liquidity provider’s anticipated profit must be allocated among these three sub-categories, such that an increased allocation to any one sub-category will result in a decreased allocation to one or more of the other categories. Dash and the liquidity provider can also adjust the amount of profit that the liquidity provider shares with Dash. The allocation of resources between the three subcategories listed above, including the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders is mitigated by market maker competition for order flow (as measured by the amount of price improvement provided), under the same general payment for order flow terms applicable to Dash.
In addition to revenues that Dash may collect for executing or facilitating the execution of E*TRADE customer orders, Dash may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize Dash to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Dash’s independent order routing and best execution obligations. Exchange rebates provided to Dash for E*TRADE customer executions by the U.S. options exchanges are not passed through to E*TRADE or its customers. Dash and/or its liquidity provider does not pass through the fees charged by the U.S. options exchanges for E*TRADE customer executions, other than the index options fees described above. E*TRADE does not share directly in any profits from U.S. options exchange rebates for executions of E*TRADE customer orders, although Dash’s and/or its liquidity provider’s receipt of such rebates could potentially be used to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Matrix Executions, LLC / Simplex Trading, LLC
6.85
8.61
9.10
8.15
4.45
3319.20
44.1383
752507.52
46.3569
702962.40
46.1609
200501.76
32.9151
E*TRADE Securities LLC (“E*TRADE”) routes U.S.-listed options orders to Matrix Executions, LLC (“Matrix”) to facilitate liquidity provision and price improvement opportunities for its customers. Matrix generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payment from Matrix (based upon the remuneration Matrix receives from the liquidity providers with which it has arrangements as described below) (i.e. payment for order flow) in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.48 per contract for simple and complex equity options orders. E*TRADE does not receive payment from Matrix for index options executions or for Professional Customer orders, which are orders of customers who submit an average of 390 options orders per trading day, per calendar month, on a quarterly basis. E*TRADE only routes U.S.-listed options orders to market makers that pay for customer order flow, and all such market makers are subject to substantially the same rate of payment, apart from a limited number of orders, which E*TRADE routes to its affiliate Morgan Stanley & Co., LLC (“MS&Co”), from which E*TRADE does not accept payment. E*TRADE and Matrix do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Matrix.
In general, public, retail, or non-professional index options order execution fees range from $0.00 to $1.32 per contract depending on the index option class and premium price, with Matrix passing exchange fees for index option executions to E*TRADE each month. For Q4 2022, E*TRADE paid total fees on customer index option executions of $164,377 in October, $0 in November, and $0 in December.
In connection with Matrix’s handling of E*TRADE retail equity option orders, Matrix has arrangements with multiple, unaffiliated liquidity providers, including Simplex Trading, LLC, designed to facilitate liquidity provision and price improvement opportunities. Pursuant to these arrangements, Matrix routes E*TRADE retail equity options orders to exchanges and may preference the liquidity providers on such applicable exchange, consistent with exchange-sponsored programs which are described in the fee schedules of each such options exchange. The liquidity providers provide Matrix with remuneration in connection with Matrix’s routing of E*TRADE retail equity options orders, including through reciprocal order flow arrangements between Matrix and such liquidity provider and/or payment per contract to Matrix in return for E*TRADE retail equity options orders that Matrix routes or directs. Matrix provides payment to E*TRADE as described above based upon the compensation Matrix receives from such liquidity providers.
There is a potential conflict to Matrix and/or the liquidity provider to which Matrix routes orders both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the liquidity provider seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, the liquidity provider can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay Matrix (and for Matrix, in turn, to pay E*TRADE) for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. The liquidity provider’s anticipated profit must be allocated among these three sub-categories, such that an increased allocation to any one sub-category will result in a decreased allocation to one or more of the other categories. Matrix and the liquidity provider can also adjust the amount of profit that the liquidity provider shares with Matrix. The allocation of resources between the three subcategories listed above, including the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders is mitigated by market maker competition for order flow (as measured by the amount of price improvement provided), under the same general payment for order flow terms applicable to Matrix.
In addition to revenues that Matrix may collect for executing or facilitating the execution of E*TRADE customer orders, Matrix may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize Matrix to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Matrix’s independent order routing and best execution obligations. Exchange rebates provided to Matrix for E*TRADE customer executions by the U.S. options exchanges are not passed through to E*TRADE or its customers. Matrix and/or its liquidity provider does not pass through the fees charged by the U.S. options exchanges for E*TRADE customer executions, other than the index options fees described above. E*TRADE does not share directly in any profits from U.S. options exchange rebates for executions of E*TRADE customer orders, although Matrix’s and/or its liquidity provider’s receipt of such rebates could potentially be used to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Morgan Stanley & Co., LLC
0.11
0.00
0.01
0.03
0.26
0.00
0.0000
0.00
0.0000
0.00
0.0000
0.00
0.0000
E*TRADE Securities LLC (“E*TRADE”) is an affiliate of Morgan Stanley & Co., LLC. (MS&Co). E*TRADE sends orders in U.S.-listed options to MS&Co to facilitate liquidity provision and price improvement opportunities for its customers. E*TRADE orders in U.S.-listed options that are sent to MS&Co are then routed by MS&Co to a U.S. options exchange to be either crossed or executed against MS&Co interest and/or other liquidity on such exchanges, subject to the principles of best execution. MS&Co generates revenue from executing or facilitating the execution of E*TRADE customer orders. E*TRADE does not receive payments from MS&Co for the orders it routes to MS&Co and E*TRADE and MS&Co do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to MS&Co.
In the course of providing liquidity, MS&Co may preference option orders to MS&Co’s options market maker or third-party market makers on the applicable exchange, consistent with exchange-sponsored programs which are described in the fee schedules of each such options exchange. MS&Co also participates in exchange-sponsored listed option payment for order flow programs under which MS&Co may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates, including from exchanges in which E*TRADE’s parent company Morgan Stanley or another affiliated entity may have a financial interest. Although MSSB has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize MS&Co to route higher percentages of E*TRADE customer orders to particular venues over others, subject to MS&Co’s independent order routing and best execution obligations. Exchange rebates provided and fees charged to MS&Co for E*TRADE customer executions by the U.S. options exchanges are not passed through to E*TRADE or its customers. However, E*TRADE is an affiliated company of MS&Co, which is a market maker on various U.S. options exchanges and MS&Co may realize market-making profits from E*TRADE orders routed to MS&Co for execution. In addition, E*TRADE orders that MS&Co executes are combined on a monthly basis with other order flow that MS&Co executes for tiered pricing program incentive purposes and it is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing programs. As a result of E*TRADE’s corporate affiliation with MS&Co, E*TRADE may share indirectly in any such profits (whether from market-making, from pricing programs, or otherwise) generated by MS&Co.
2022
11
99.46
53.45
5.57
28.48
12.50
CITADEL SECURITIES LLC
29.88
36.28
33.95
15.31
33.86
330666.19
20.0000
59634.82
20.0002
61051.95
30.7606
87009.42
20.4673
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Citadel Securities LLC (“Citadel”) to facilitate liquidity provision and price improvement opportunities for its customers. Citadel generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Citadel in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Citadel for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Citadel to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Citadel whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Citadel do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Citadel.
There is a potential conflict to a market maker such as Citadel both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Citadel can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Citadel’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Citadel.
In addition to revenues that Citadel may collect for executing or facilitating the execution of E*TRADE customer orders, Citadel also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Citadel to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Citadel’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Citadel receives for executions of E*TRADE customer orders, although Citadel could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Virtu Americas, LLC
25.34
26.78
25.07
22.10
26.70
252801.15
20.0000
43128.65
17.7502
62863.59
25.8610
56032.98
11.8197
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Virtu Americas, LLC (“Virtu”) to facilitate liquidity provision and price improvement opportunities for its customers. Virtu generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Virtu in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Virtu for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Virtu to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Virtu whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Virtu do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Virtu.
There is a potential conflict to a market maker such as Virtu both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Virtu can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Virtu’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Virtu.
In addition to revenues that Virtu may collect for executing or facilitating the execution of E*TRADE customer orders, Virtu also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Virtu to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Virtu’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Virtu receives for executions of E*TRADE customer orders, although Virtu could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
G1 Execution Services, LLC
23.78
18.45
21.03
35.18
21.76
163521.66
19.4606
34263.77
19.4948
111960.16
29.4052
58616.87
22.1976
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to G1 Execution Services, LLC (“G1X”) to facilitate liquidity provision and price improvement opportunities for its customers. G1X generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from G1X in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from G1X for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow G1X to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with G1X whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and G1X do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to G1X.
There is a potential conflict to a market maker such as G1X both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as G1X can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as G1X’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to G1X.
In addition to revenues that G1X may collect for executing or facilitating the execution of E*TRADE customer orders, G1X also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize G1X to route higher percentages of E*TRADE customer orders to particular venues over others, subject to G1X’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates G1X receives for executions of E*TRADE customer orders, although G1X could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Jane Street Capital
10.15
13.95
13.78
2.73
9.17
138550.91
20.0060
24975.70
20.0000
10613.14
30.7291
28056.63
20.1341
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Jane Street Capital (“Jane Street”) to facilitate liquidity provision and price improvement opportunities for its customers. Jane Street generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Jane Street in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Jane Street for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Jane Street to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Jane Street whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Jane Street do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Jane Street.
There is a potential conflict to a market maker such as Jane Street both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Jane Street can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Jane Street’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Jane Street.
In addition to revenues that Jane Street may collect for executing or facilitating the execution of E*TRADE customer orders, Jane Street also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Jane Street to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Jane Street’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Jane Street receives for executions of E*TRADE customer orders, although Jane Street could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both
Two Sigma Securities, LLC
5.24
2.22
3.32
12.03
3.54
18065.53
18.9316
4429.32
15.9288
53407.99
28.2909
12915.41
24.9001
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Two Sigma Securities, LLC (“Two Sigma”) to facilitate liquidity provision and price improvement opportunities for its customers. Two Sigma generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Two Sigma in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Two Sigma for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Two Sigma to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Two Sigma whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Two Sigma do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Two Sigma.
There is a potential conflict to a market maker such as Two Sigma both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Two Sigma can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Two Sigma’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Two Sigma.
In addition to revenues that Two Sigma may collect for executing or facilitating the execution of E*TRADE customer orders, Two Sigma also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Two Sigma to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Two Sigma’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Two Sigma receives for executions of E*TRADE customer orders, although Two Sigma could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
UBS Securities, LLC
2.29
2.32
2.14
1.92
3.08
14899.29
20.0000
6446.58
20.1736
10502.93
30.4759
9424.86
22.6265
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to UBS Securities, LLC (“UBS”) to facilitate liquidity provision and price improvement opportunities for its customers. UBS generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from UBS in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from UBS for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow UBS to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with UBS whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and UBS do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to UBS.
There is a potential conflict to a market maker such as UBS both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as UBS can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as UBS’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to UBS.
In addition to revenues that UBS may collect for executing or facilitating the execution of E*TRADE customer orders, UBS also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize UBS to route higher percentages of E*TRADE customer orders to particular venues over others, subject to UBS’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates UBS receives for executions of E*TRADE customer orders, although UBS could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
The Nasdaq Stock Market
1.55
0.00
0.28
5.10
0.69
0.00
0.0000
-1397.88
-28.8210
20231.61
32.4396
-336.94
-15.1276
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to the Nasdaq Stock Market (“NASDAQ”) to facilitate liquidity provision and price improvement opportunities for its customers, as specified in the above Public Order Routing Report statistics. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under NASDAQ’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because NASDAQ offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to NASDAQ rather than another venue in order to reach a higher tier. E*TRADE and NASDAQ do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the NASDAQ Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to NASDAQ.
The fees E*TRADE pays and rebates E*TRADE receives from NASDAQ for NMS equity executions are determined based on NASDAQ’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by NASDAQ in the NASDAQ Fees Schedule, available at http://www.nasdaqtrader.com/trader.aspx?id=bx_pricing. Please note that NASDAQ’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, NASDAQ paid E*TRADE standard rebate rates of $0.00325 per share for executions priced at $1.00 per share or more and did not pay any per share amount for executions priced below $1.00 per share. Executions that removed liquidity from NASDAQ qualified for tiered pricing and E*TRADE was charged fees of $0.003 per share for executions priced at $1.00 per share or more and 0.30% of the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from NASDAQ in the amount of $86,501 in October, $89,596 in November, and $84,613 in December.
E*TRADE also participates in NASDAQ’s retail order priority program under which eligible retail orders receive priority ahead of other available interest at a given price level or other enhanced execution benefits. E*TRADE reviews customers’ activity on a periodic basis to determine program eligibility and reserves the right to choose whether to participate in the NASDAQ retail order priority program. E*TRADE is an affiliated company of Morgan Stanley & Co. LLC (“MS&Co”), which is a market maker on NASDAQ and may realize profits from orders it routes to NASDAQ for execution. E*TRADE may share indirectly in such profits generated by MS&Co as a result of the corporate affiliation between MS&Co and E*TRADE. E*TRADE and MS&Co order execution volumes are combined on a monthly basis for tiered pricing program incentive purposes. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
Cboe EDGX Exchange, Inc.
1.49
0.00
0.36
4.70
1.01
0.00
0.0000
-425.83
-14.7064
28658.88
31.3890
0.00
0.0000
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to the Cboe EDGX Exchange, Inc. (“EDGX”) to facilitate liquidity provision and price improvement opportunities for its customers, as specified in the above Public Order Routing Report statistics. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under EDGX’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because EDGX offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to EDGX rather than another venue in order to reach a higher tier. E*TRADE and EDGX do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the EDGX Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to EDGX.
The fees E*TRADE pays and rebates E*TRADE receives from EDGX for NMS equity executions are determined based on EDGX’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by EDGX in the EDGX Fees Schedule, available at http://www.cboe.com/us/equities/membership/fee_schedule/edgx/. Please note that EDGX’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, EDGX paid E*TRADE standard rebate rates of $0.0032 per share for executions priced at $1.00 per share or more and $0.00003 for executions priced below $1.00 per share. Executions that removed liquidity from EDGX qualified for tiered pricing and E*TRADE was not charged a per share fee for executions priced at $1.00 per share or more or charged a per share fee of the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from EDGX in the amount of $107,417 in October, $132,800 in November, and $115,288 in December.
E*TRADE also participates in EDGX’s retail order priority program under which eligible retail orders receive priority ahead of other available interest at a given price level or other enhanced execution benefits. E*TRADE reviews customers’ activity on a periodic basis to determine program eligibility and reserves the right to choose whether to participate in the EDGX’s retail order priority program. E*TRADE is an affiliated company of Morgan Stanley & Co. LLC (“Morgan Stanley”), which is a market maker on EDGX and may realize profits from orders it routes to EDGX for execution. E*TRADE may share indirectly in such profits generated by MS&Co as a result of the corporate affiliation between MS&Co and E*TRADE. E*TRADE and MS&Co order execution volumes are combined on a monthly basis for tiered pricing program incentive purposes. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
Members Exchange (MEMX)
0.29
0.00
0.07
0.91
0.19
0.00
0.0000
-55.65
-13.3287
5744.35
35.0000
958.08
34.3514
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to MEMX LLC (“MEMX”) as specified in the above Public Order Routing Report disclosures. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under MEMX’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because MEMX offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to MEMX rather than another venue in order to reach a higher tier. E*TRADE and MEMX do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the MEMX Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to MEMX.
The fees E*TRADE pays and rebates E*TRADE receives from MEMX for NMS equity executions are determined based on MEMX’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by MEMX in the MEMX Fees Schedule, available at http://info.memxtrading.com/fee-schedule/. Please note that MEMX’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, MEMX paid E*TRADE standard rebate rates of $0.0035 per share for executions priced at $1.00 per share or more and 0.075% of the total trade notional value for executions priced below $1.00 per share. On executions that removed liquidity from MEMX qualified for tiered pricing, E*TRADE was not charged a per share fee for executions priced at $1.00 per share or more nor charged a per share fee for the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from MEMX in the amount of $26,766 in October, $24,122 in November, and $25,656 in December.
E*TRADE is an affiliated company of Strategic Investments I, Inc., both of which are wholly owned subsidiaries of Morgan Stanley and investor-shareholders of MEMX. Accordingly, E*TRADE, both directly and indirectly through its parent company Morgan Stanley and/or its affiliates may share in profits realized by MEMX, which could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to MEMX over other execution venues. Additionally, E*TRADE is an affiliated company of Morgan Stanley & Co., LLC (“MS&Co”), which is market maker on MEMX and may realize profits from orders it routes to MEMX for execution. E*TRADE may share directly or indirectly in any such profits generated by MS&Co. E*TRADE orders routed to MEMX through MS&Co will be combined with any other order flow that MS&Co routes to MEMX for the purpose of determining the applicable pricing under MEMX’s tiered pricing model described above. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
99.37
44.56
10.30
34.26
10.88
CITADEL SECURITIES LLC
28.63
36.16
34.67
15.62
33.04
1062411.58
16.3968
429852.63
7.3349
294001.77
17.6717
230603.10
16.2852
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Citadel Securities LLC (“Citadel”) to facilitate liquidity provision and price improvement opportunities for its customers. Citadel generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Citadel in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Citadel for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Citadel to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Citadel whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Citadel do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Citadel.
There is a potential conflict to a market maker such as Citadel both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Citadel can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Citadel’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Citadel.
In addition to revenues that Citadel may collect for executing or facilitating the execution of E*TRADE customer orders, Citadel also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Citadel to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Citadel’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Citadel receives for executions of E*TRADE customer orders, although Citadel could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Virtu Americas, LLC
24.80
26.71
25.33
21.57
26.66
817053.79
16.3266
296868.38
6.5195
243840.77
17.1282
143162.34
4.3226
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Virtu Americas, LLC (“Virtu”) to facilitate liquidity provision and price improvement opportunities for its customers. Virtu generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Virtu in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Virtu for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Virtu to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Virtu whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Virtu do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Virtu.
There is a potential conflict to a market maker such as Virtu both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Virtu can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Virtu’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Virtu.
In addition to revenues that Virtu may collect for executing or facilitating the execution of E*TRADE customer orders, Virtu also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Virtu to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Virtu’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Virtu receives for executions of E*TRADE customer orders, although Virtu could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
G1 Execution Services, LLC
24.23
17.98
19.66
34.27
22.53
527275.32
16.2179
229636.64
7.5661
511930.58
19.1472
152964.62
18.4462
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to G1 Execution Services, LLC (“G1X”) to facilitate liquidity provision and price improvement opportunities for its customers. G1X generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from G1X in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from G1X for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow G1X to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with G1X whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and G1X do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to G1X.
There is a potential conflict to a market maker such as G1X both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as G1X can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as G1X’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to G1X.
In addition to revenues that G1X may collect for executing or facilitating the execution of E*TRADE customer orders, G1X also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize G1X to route higher percentages of E*TRADE customer orders to particular venues over others, subject to G1X’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates G1X receives for executions of E*TRADE customer orders, although G1X could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Jane Street Capital
9.81
14.62
14.28
2.76
8.14
454925.65
16.4462
185301.53
7.5891
41265.67
18.4477
65006.10
17.3745
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Jane Street Capital (“Jane Street”) to facilitate liquidity provision and price improvement opportunities for its customers. Jane Street generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Jane Street in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Jane Street for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Jane Street to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Jane Street whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Jane Street do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Jane Street.
There is a potential conflict to a market maker such as Jane Street both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Jane Street can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Jane Street’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Jane Street.
In addition to revenues that Jane Street may collect for executing or facilitating the execution of E*TRADE customer orders, Jane Street also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Jane Street to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Jane Street’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Jane Street receives for executions of E*TRADE customer orders, although Jane Street could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Two Sigma Securities, LLC
6.02
2.24
3.19
12.40
4.07
59789.38
14.9899
35639.57
5.7155
248953.40
14.9674
25738.86
20.9126
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Two Sigma Securities, LLC (“Two Sigma”) to facilitate liquidity provision and price improvement opportunities for its customers. Two Sigma generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Two Sigma in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Two Sigma for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Two Sigma to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Two Sigma whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Two Sigma do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Two Sigma.
There is a potential conflict to a market maker such as Two Sigma both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Two Sigma can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Two Sigma’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Two Sigma.
In addition to revenues that Two Sigma may collect for executing or facilitating the execution of E*TRADE customer orders, Two Sigma also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Two Sigma to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Two Sigma’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Two Sigma receives for executions of E*TRADE customer orders, although Two Sigma could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
UBS Securities, LLC
2.37
2.29
2.20
2.24
3.30
47801.90
16.1094
37103.97
10.1074
48028.18
14.9605
23901.58
16.1533
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to UBS Securities, LLC (“UBS”) to facilitate liquidity provision and price improvement opportunities for its customers. UBS generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from UBS in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from UBS for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow UBS to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with UBS whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and UBS do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to UBS.
There is a potential conflict to a market maker such as UBS both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as UBS can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as UBS’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to UBS.
In addition to revenues that UBS may collect for executing or facilitating the execution of E*TRADE customer orders, UBS also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize UBS to route higher percentages of E*TRADE customer orders to particular venues over others, subject to UBS’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates UBS receives for executions of E*TRADE customer orders, although UBS could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Cboe EDGX Exchange, Inc.
1.91
0.00
0.33
5.10
1.20
0.00
0.0000
-3422.55
-8.2845
100494.26
19.3384
0.00
0.0000
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to the Cboe EDGX Exchange, Inc. (“EDGX”) to facilitate liquidity provision and price improvement opportunities for its customers, as specified in the above Public Order Routing Report statistics. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under EDGX’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because EDGX offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to EDGX rather than another venue in order to reach a higher tier. E*TRADE and EDGX do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the EDGX Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to EDGX.
The fees E*TRADE pays and rebates E*TRADE receives from EDGX for NMS equity executions are determined based on EDGX’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by EDGX in the EDGX Fees Schedule, available at http://www.cboe.com/us/equities/membership/fee_schedule/edgx/. Please note that EDGX’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, EDGX paid E*TRADE standard rebate rates of $0.0032 per share for executions priced at $1.00 per share or more and $0.00003 for executions priced below $1.00 per share. Executions that removed liquidity from EDGX qualified for tiered pricing and E*TRADE was not charged a per share fee for executions priced at $1.00 per share or more or charged a per share fee of the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from EDGX in the amount of $107,417 in October, $132,800 in November, and $115,288 in December.
E*TRADE also participates in EDGX’s retail order priority program under which eligible retail orders receive priority ahead of other available interest at a given price level or other enhanced execution benefits. E*TRADE reviews customers’ activity on a periodic basis to determine program eligibility and reserves the right to choose whether to participate in the EDGX’s retail order priority program. E*TRADE is an affiliated company of Morgan Stanley & Co. LLC (“Morgan Stanley”), which is a market maker on EDGX and may realize profits from orders it routes to EDGX for execution. E*TRADE may share indirectly in such profits generated by MS&Co as a result of the corporate affiliation between MS&Co and E*TRADE. E*TRADE and MS&Co order execution volumes are combined on a monthly basis for tiered pricing program incentive purposes. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
The Nasdaq Stock Market
1.86
0.00
0.27
5.09
0.84
0.00
0.0000
-8599.59
-22.2104
74298.55
19.5816
-2763.20
-11.9043
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to the Nasdaq Stock Market (“NASDAQ”) to facilitate liquidity provision and price improvement opportunities for its customers, as specified in the above Public Order Routing Report statistics. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under NASDAQ’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because NASDAQ offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to NASDAQ rather than another venue in order to reach a higher tier. E*TRADE and NASDAQ do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the NASDAQ Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to NASDAQ.
The fees E*TRADE pays and rebates E*TRADE receives from NASDAQ for NMS equity executions are determined based on NASDAQ’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by NASDAQ in the NASDAQ Fees Schedule, available at http://www.nasdaqtrader.com/trader.aspx?id=bx_pricing. Please note that NASDAQ’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, NASDAQ paid E*TRADE standard rebate rates of $0.00325 per share for executions priced at $1.00 per share or more and did not pay any per share amount for executions priced below $1.00 per share. Executions that removed liquidity from NASDAQ qualified for tiered pricing and E*TRADE was charged fees of $0.003 per share for executions priced at $1.00 per share or more and 0.30% of the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from NASDAQ in the amount of $86,501 in October, $89,596 in November, and $84,613 in December.
E*TRADE also participates in NASDAQ’s retail order priority program under which eligible retail orders receive priority ahead of other available interest at a given price level or other enhanced execution benefits. E*TRADE reviews customers’ activity on a periodic basis to determine program eligibility and reserves the right to choose whether to participate in the NASDAQ retail order priority program. E*TRADE is an affiliated company of Morgan Stanley & Co. LLC (“MS&Co”), which is a market maker on NASDAQ and may realize profits from orders it routes to NASDAQ for execution. E*TRADE may share indirectly in such profits generated by MS&Co as a result of the corporate affiliation between MS&Co and E*TRADE. E*TRADE and MS&Co order execution volumes are combined on a monthly basis for tiered pricing program incentive purposes. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
Members Exchange (MEMX)
0.36
0.00
0.07
0.95
0.23
0.00
0.0000
-1188.99
-11.1663
17728.39
21.8568
936.68
33.0986
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to MEMX LLC (“MEMX”) as specified in the above Public Order Routing Report disclosures. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under MEMX’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because MEMX offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to MEMX rather than another venue in order to reach a higher tier. E*TRADE and MEMX do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the MEMX Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to MEMX.
The fees E*TRADE pays and rebates E*TRADE receives from MEMX for NMS equity executions are determined based on MEMX’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by MEMX in the MEMX Fees Schedule, available at http://info.memxtrading.com/fee-schedule/. Please note that MEMX’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, MEMX paid E*TRADE standard rebate rates of $0.0035 per share for executions priced at $1.00 per share or more and 0.075% of the total trade notional value for executions priced below $1.00 per share. On executions that removed liquidity from MEMX qualified for tiered pricing, E*TRADE was not charged a per share fee for executions priced at $1.00 per share or more nor charged a per share fee for the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from MEMX in the amount of $26,766 in October, $24,122 in November, and $25,656 in December.
E*TRADE is an affiliated company of Strategic Investments I, Inc., both of which are wholly owned subsidiaries of Morgan Stanley and investor-shareholders of MEMX. Accordingly, E*TRADE, both directly and indirectly through its parent company Morgan Stanley and/or its affiliates may share in profits realized by MEMX, which could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to MEMX over other execution venues. Additionally, E*TRADE is an affiliated company of Morgan Stanley & Co., LLC (“MS&Co”), which is market maker on MEMX and may realize profits from orders it routes to MEMX for execution. E*TRADE may share directly or indirectly in any such profits generated by MS&Co. E*TRADE orders routed to MEMX through MS&Co will be combined with any other order flow that MS&Co routes to MEMX for the purpose of determining the applicable pricing under MEMX’s tiered pricing model described above. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
99.97
18.31
8.37
36.18
37.13
CITADEL SECURITIES LLC
36.95
42.17
41.71
41.48
28.90
2919704.76
46.9703
2676799.29
46.8580
1865866.50
45.0896
1057982.22
37.4156
E*TRADE Securities LLC (“E*TRADE”) routes U.S.-listed options orders to Citadel Securities LLC (“Citadel”) to facilitate liquidity provision and price improvement opportunities for its customers. Citadel generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Citadel in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.48 per contract for simple and complex equity options orders. E*TRADE does not receive remuneration from Citadel for index options executions or for Professional Customer orders, which are orders of customers who submit an average of 390 options orders per trading day, per calendar month, on a quarterly basis. E*TRADE routes U.S.-listed options orders only (except as indicated in the next sentence) to market makers that pay for customer order flow (and all such market makers pay substantially the same rates). As an exception to the foregoing sentence, E*TRADE routes a limited number of orders to its affiliate, Morgan Stanley & Co. LLC (“MS&Co”), from which E*TRADE does not accept payment. E*TRADE and Citadel do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Citadel.
In general, public, retail, or non-professional index options order execution fees range from $0.00 to $1.32 per contract, depending on the index option class and premium price, with Citadel passing exchange fees for index option executions back to E*TRADE each month. For Q4 2022, E*TRADE paid total fees on customer index options executions of $336,405 in October, $304,046 in November, and $297,288 in December.
There is a potential conflict to an options market maker such as Citadel both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the options market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, an options market maker such as Citadel can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. An options market maker’s (such as Citadel’s) anticipated profit must be allocated among these three sub-categories, such that an increased allocation to any one sub-category will result in a decreased allocation to one or more of the other categories, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by market maker competition for order flow (as measured by the amount of price improvement provided), under the same general payment for order flow terms applicable to Citadel.
In addition to revenues that Citadel may collect for executing or facilitating the execution of E*TRADE customer orders, Citadel may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize Citadel to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Citadel’s independent order routing and best execution obligation. Exchange rebates provided to Citadel for E*TRADE customer order executions by the U.S. options exchanges are not passed through to E*TRADE or its customers although Citadel’s receipt of such rebates could potentially be used to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both. Citadel does not pass through the fees that it is charged by the U.S. options exchanges for E*TRADE customer options order executions, other than the index options fees described above.
Wolverine Execution Services, LLC
24.46
22.34
22.65
22.87
27.47
1491910.20
48.3278
1120640.86
46.8840
1237249.33
48.0178
1640531.49
48.6907
E*TRADE Securities LLC (“E*TRADE”) routes U.S.-listed options orders to Wolverine Execution Services, LLC (“Wolverine”) to facilitate liquidity provision and price improvement opportunities for its customers. Wolverine generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Wolverine in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.48 per contract for simple and complex equity options orders. E*TRADE does not receive remuneration from Wolverine for index options executions or for Professional Customer orders, which are orders of customers who submit an average of 390 options orders per trading day, per calendar month, on a quarterly basis. E*TRADE only routes U.S.-listed options orders to market makers that pay for customer order flow, and all such market makers are subject to substantially the same rate of payment, apart from a limited number of orders, which E*TRADE routes to its affiliate Morgan Stanley & Co., LLC (“MS&Co”), from which E*TRADE does not accept payment. E*TRADE and Wolverine do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Wolverine.
In general, public, retail, or non-professional index options order execution fees range from $0.00 to $1.32 per contract, depending on the index option class and premium price, with Wolverine passing exchange fees for index option executions back to E*TRADE each month. For Q4 2022, E*TRADE paid total fees on customer index options executions of $1,002,668 in October, $924,456 in November, and $897,898 in December.
There is a potential conflict to an options market maker such as Wolverine both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the options market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, an options market maker such as Wolverine can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. An options market maker’s (such as Wolverine’s) anticipated profit must be allocated among these three sub-categories, such that an increased allocation to any one sub-category will result in a decreased allocation to one or more of the other categories, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by market maker competition for order flow (as measured by the amount of price improvement provided), under the same general payment for order flow terms applicable to Wolverine.
In addition to revenues that Wolverine may collect for executing or facilitating the execution of E*TRADE customer orders, Wolverine may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize Wolverine to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Wolverine’s independent order routing and best execution obligation. Exchange rebates provided to Wolverine for E*TRADE customer order executions by the U.S. options exchanges are not passed through to E*TRADE or its customers although Wolverine’s receipt of such rebates could potentially be used to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both. Wolverine does not pass through the fees that it is charged by the U.S. options exchanges for E*TRADE customer options order executions, other than the index options fees described above.
Global Execution Brokers LP
21.42
26.75
26.21
26.18
13.06
1844433.43
47.1118
1396529.99
46.6964
1385200.89
45.8929
537572.34
34.8193
E*TRADE Securities LLC (“E*TRADE”) routes U.S.-listed options orders to Global Execution Brokers LP (“G1X”) to facilitate liquidity provision and price improvement opportunities for its customers. G1X generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from G1X in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.48 per contract for simple and complex equity options orders. E*TRADE does not receive remuneration from G1X for index options executions or for Professional Customer orders, which are orders of customers who submit an average of 390 options orders per trading day, per calendar month, on a quarterly basis. E*TRADE only routes U.S.-listed options orders to market makers that pay for customer order flow, and all such market makers are subject to substantially the same rate of payment, apart from a limited number of orders, which E*TRADE routes to its affiliate Morgan Stanley & Co., LLC (“MS&Co”), from which E*TRADE does not accept payment. E*TRADE and G1X do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to G1X.
In general, public, retail, or non-professional index options order execution fees range from $0.00 to $1.32 per contract, depending on the index option class and premium price, with G1X passing exchange fees for index option executions back to E*TRADE each month. For Q4 2022, E*TRADE paid total fees on customer index options executions of $201,391 in October, $169,759 in November, and $174,665 in December.
There is a potential conflict to an options market maker such as G1X both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the options market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, an options market maker such as G1X can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. An options market maker’s (such as G1X’s) anticipated profit must be allocated among these three sub-categories, such that an increased allocation to any one sub-category will result in a decreased allocation to one or more of the other categories, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by market maker competition for order flow (as measured by the amount of price improvement provided), under the same general payment for order flow terms applicable to G1X.
In addition to revenues that G1X may collect for executing or facilitating the execution of E*TRADE customer orders, G1X may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize G1X to route higher percentages of E*TRADE customer orders to particular venues over others, subject to G1X’s independent order routing and best execution obligation. Exchange rebates provided to G1X for E*TRADE customer order executions by the U.S. options exchanges are not passed through to E*TRADE or its customers although G1X’s receipt of such rebates could potentially be used to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both. G1X does not pass through the fees that it is charged by the U.S. options exchanges for E*TRADE customer options order executions, other than the index options fees described above.
Dash/IMC Financial Markets
17.04
8.74
9.41
9.44
30.26
468360.42
37.8496
310506.08
33.9032
271947.24
27.9992
1228833.30
30.0516
E*TRADE Securities LLC (“E*TRADE”) routes U.S.-listed options orders to Dash Financial Technologies, LLC (“Dash”) to facilitate liquidity provision and price improvement opportunities for its customers. Dash generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Dash (based upon the remuneration Dash receives from the liquidity providers with which it has arrangements as described below) (i.e. payment for order flow) in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.48 per contract for simple and complex equity options orders. E*TRADE does not receive remuneration from Dash for index options executions or for Professional Customer orders, which are orders of customers who submit an average of 390 options orders per trading day, per calendar month, on a quarterly basis. E*TRADE only routes U.S.-listed options orders to market makers that pay for customer order flow, and all such market makers are subject to substantially the same rate of payment, apart from a limited number of orders, which E*TRADE routes to its affiliate Morgan Stanley & Co., LLC (“MS&Co”), from which E*TRADE does not accept payment. E*TRADE and Dash do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Dash.
In general, public, retail, or non-professional index options order execution fees range from $0.00 to $1.32 per contract depending on the index option class and premium price, with Dash passing exchange fees for index option executions to E*TRADE each month. For Q4 2022, E*TRADE paid total fees on customer index option executions of $441,171 in October, $597,955 in November, and $570,683 in December.
In connection with Dash ’s handling of E*TRADE retail equity option orders, Dash has arrangements with multiple, unaffiliated liquidity providers, including IMC Financial Markets, designed to facilitate liquidity provision and price improvement opportunities. Pursuant to these arrangements, Dash routes E*TRADE retail equity options orders to exchanges and may preference the liquidity providers on such applicable exchange, consistent with exchange-sponsored programs which are described in the fee schedules of each such options exchange. The liquidity providers provide Dash with remuneration in connection with Dash ’s routing of E*TRADE retail equity options orders, including through reciprocal order flow arrangements between Dash and such liquidity provider and/or payment per contract to Dash in return for E*TRADE retail equity options orders that Dash routes or directs. Dash provides payment to E*TRADE as described above based upon the compensation Dash receives from such liquidity providers.
There is a potential conflict to Dash and/or the liquidity provider to which Dash routes orders both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the liquidity provider seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, the liquidity provider can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay Dash (and for Dash, in turn, to pay E*TRADE) for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. The liquidity provider’s anticipated profit must be allocated among these three sub-categories, such that an increased allocation to any one sub-category will result in a decreased allocation to one or more of the other categories. Dash and the liquidity provider can also adjust the amount of profit that the liquidity provider shares with Dash. The allocation of resources between the three subcategories listed above, including the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders is mitigated by market maker competition for order flow (as measured by the amount of price improvement provided), under the same general payment for order flow terms applicable to Dash.
In addition to revenues that Dash may collect for executing or facilitating the execution of E*TRADE customer orders, Dash may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize Dash to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Dash’s independent order routing and best execution obligations. Exchange rebates provided to Dash for E*TRADE customer executions by the U.S. options exchanges are not passed through to E*TRADE or its customers. Dash and/or its liquidity provider does not pass through the fees charged by the U.S. options exchanges for E*TRADE customer executions, other than the index options fees described above. E*TRADE does not share directly in any profits from U.S. options exchange rebates for executions of E*TRADE customer orders, although Dash’s and/or its liquidity provider’s receipt of such rebates could potentially be used to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Morgan Stanley & Co., LLC
0.13
0.00
0.01
0.04
0.30
0.00
0.0000
0.00
0.0000
0.00
0.0000
0.00
0.0000
E*TRADE Securities LLC (“E*TRADE”) is an affiliate of Morgan Stanley & Co., LLC. (MS&Co). E*TRADE sends orders in U.S.-listed options to MS&Co to facilitate liquidity provision and price improvement opportunities for its customers. E*TRADE orders in U.S.-listed options that are sent to MS&Co are then routed by MS&Co to a U.S. options exchange to be either crossed or executed against MS&Co interest and/or other liquidity on such exchanges, subject to the principles of best execution. MS&Co generates revenue from executing or facilitating the execution of E*TRADE customer orders. E*TRADE does not receive payments from MS&Co for the orders it routes to MS&Co and E*TRADE and MS&Co do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to MS&Co.
In the course of providing liquidity, MS&Co may preference option orders to MS&Co’s options market maker or third-party market makers on the applicable exchange, consistent with exchange-sponsored programs which are described in the fee schedules of each such options exchange. MS&Co also participates in exchange-sponsored listed option payment for order flow programs under which MS&Co may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates, including from exchanges in which E*TRADE’s parent company Morgan Stanley or another affiliated entity may have a financial interest. Although MSSB has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize MS&Co to route higher percentages of E*TRADE customer orders to particular venues over others, subject to MS&Co’s independent order routing and best execution obligations. Exchange rebates provided and fees charged to MS&Co for E*TRADE customer executions by the U.S. options exchanges are not passed through to E*TRADE or its customers. However, E*TRADE is an affiliated company of MS&Co, which is a market maker on various U.S. options exchanges and MS&Co may realize market-making profits from E*TRADE orders routed to MS&Co for execution. In addition, E*TRADE orders that MS&Co executes are combined on a monthly basis with other order flow that MS&Co executes for tiered pricing program incentive purposes and it is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing programs. As a result of E*TRADE’s corporate affiliation with MS&Co, E*TRADE may share indirectly in any such profits (whether from market-making, from pricing programs, or otherwise) generated by MS&Co.
2022
12
99.55
53.66
5.66
28.58
12.11
CITADEL SECURITIES LLC
29.88
36.28
34.45
15.25
33.95
304968.64
20.0000
57947.11
20.0011
50936.60
30.7138
75145.89
20.2444
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Citadel Securities LLC (“Citadel”) to facilitate liquidity provision and price improvement opportunities for its customers. Citadel generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Citadel in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Citadel for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Citadel to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Citadel whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Citadel do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Citadel.
There is a potential conflict to a market maker such as Citadel both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Citadel can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Citadel’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Citadel.
In addition to revenues that Citadel may collect for executing or facilitating the execution of E*TRADE customer orders, Citadel also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Citadel to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Citadel’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Citadel receives for executions of E*TRADE customer orders, although Citadel could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Virtu Americas, LLC
26.41
28.33
26.38
22.03
28.25
247098.63
20.0000
41538.52
18.1020
56017.60
26.6570
53721.56
13.1433
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Virtu Americas, LLC (“Virtu”) to facilitate liquidity provision and price improvement opportunities for its customers. Virtu generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Virtu in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Virtu for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Virtu to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Virtu whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Virtu do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Virtu.
There is a potential conflict to a market maker such as Virtu both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Virtu can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Virtu’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Virtu.
In addition to revenues that Virtu may collect for executing or facilitating the execution of E*TRADE customer orders, Virtu also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Virtu to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Virtu’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Virtu receives for executions of E*TRADE customer orders, although Virtu could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
G1 Execution Services, LLC
21.58
15.27
18.07
35.05
19.37
123447.37
19.4383
23854.08
19.3357
96800.91
29.3388
43600.16
22.2810
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to G1 Execution Services, LLC (“G1X”) to facilitate liquidity provision and price improvement opportunities for its customers. G1X generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from G1X in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from G1X for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow G1X to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with G1X whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and G1X do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to G1X.
There is a potential conflict to a market maker such as G1X both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as G1X can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as G1X’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to G1X.
In addition to revenues that G1X may collect for executing or facilitating the execution of E*TRADE customer orders, G1X also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize G1X to route higher percentages of E*TRADE customer orders to particular venues over others, subject to G1X’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates G1X receives for executions of E*TRADE customer orders, although G1X could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Jane Street Capital
11.24
15.63
15.29
2.71
10.00
139829.67
20.0048
27083.82
20.0000
8977.61
30.4846
27247.92
19.9552
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Jane Street Capital (“Jane Street”) to facilitate liquidity provision and price improvement opportunities for its customers. Jane Street generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Jane Street in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Jane Street for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Jane Street to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Jane Street whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Jane Street do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Jane Street.
There is a potential conflict to a market maker such as Jane Street both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Jane Street can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Jane Street’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Jane Street.
In addition to revenues that Jane Street may collect for executing or facilitating the execution of E*TRADE customer orders, Jane Street also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Jane Street to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Jane Street’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Jane Street receives for executions of E*TRADE customer orders, although Jane Street could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both
Two Sigma Securities, LLC
5.23
2.23
3.20
12.02
3.48
16823.61
18.9430
4002.15
14.0926
43360.70
28.5938
9841.67
24.9316
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Two Sigma Securities, LLC (“Two Sigma”) to facilitate liquidity provision and price improvement opportunities for its customers. Two Sigma generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Two Sigma in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Two Sigma for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Two Sigma to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Two Sigma whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Two Sigma do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Two Sigma.
There is a potential conflict to a market maker such as Two Sigma both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Two Sigma can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Two Sigma’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Two Sigma.
In addition to revenues that Two Sigma may collect for executing or facilitating the execution of E*TRADE customer orders, Two Sigma also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Two Sigma to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Two Sigma’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Two Sigma receives for executions of E*TRADE customer orders, although Two Sigma could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
UBS Securities, LLC
2.27
2.26
2.15
1.96
3.15
13744.35
19.9998
6027.35
20.2794
9149.13
30.5455
7459.38
22.4558
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to UBS Securities, LLC (“UBS”) to facilitate liquidity provision and price improvement opportunities for its customers. UBS generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from UBS in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from UBS for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow UBS to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with UBS whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and UBS do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to UBS.
There is a potential conflict to a market maker such as UBS both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as UBS can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as UBS’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to UBS.
In addition to revenues that UBS may collect for executing or facilitating the execution of E*TRADE customer orders, UBS also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize UBS to route higher percentages of E*TRADE customer orders to particular venues over others, subject to UBS’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates UBS receives for executions of E*TRADE customer orders, although UBS could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
The Nasdaq Stock Market
1.56
0.00
0.18
5.14
0.64
0.00
0.0000
-730.44
-22.2824
17043.30
32.4316
0.00
0.0000
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to the Nasdaq Stock Market (“NASDAQ”) to facilitate liquidity provision and price improvement opportunities for its customers, as specified in the above Public Order Routing Report statistics. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under NASDAQ’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because NASDAQ offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to NASDAQ rather than another venue in order to reach a higher tier. E*TRADE and NASDAQ do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the NASDAQ Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to NASDAQ.
The fees E*TRADE pays and rebates E*TRADE receives from NASDAQ for NMS equity executions are determined based on NASDAQ’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by NASDAQ in the NASDAQ Fees Schedule, available at http://www.nasdaqtrader.com/trader.aspx?id=bx_pricing. Please note that NASDAQ’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, NASDAQ paid E*TRADE standard rebate rates of $0.00325 per share for executions priced at $1.00 per share or more and did not pay any per share amount for executions priced below $1.00 per share. Executions that removed liquidity from NASDAQ qualified for tiered pricing and E*TRADE was charged fees of $0.003 per share for executions priced at $1.00 per share or more and 0.30% of the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from NASDAQ in the amount of $86,501 in October, $89,596 in November, and $84,613 in December.
E*TRADE also participates in NASDAQ’s retail order priority program under which eligible retail orders receive priority ahead of other available interest at a given price level or other enhanced execution benefits. E*TRADE reviews customers’ activity on a periodic basis to determine program eligibility and reserves the right to choose whether to participate in the NASDAQ retail order priority program. E*TRADE is an affiliated company of Morgan Stanley & Co. LLC (“MS&Co”), which is a market maker on NASDAQ and may realize profits from orders it routes to NASDAQ for execution. E*TRADE may share indirectly in such profits generated by MS&Co as a result of the corporate affiliation between MS&Co and E*TRADE. E*TRADE and MS&Co order execution volumes are combined on a monthly basis for tiered pricing program incentive purposes. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
Cboe EDGX Exchange, Inc.
1.52
0.00
0.22
4.86
0.96
0.00
0.0000
-190.26
-12.6991
21972.46
31.4702
0.00
0.0000
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to the Cboe EDGX Exchange, Inc. (“EDGX”) to facilitate liquidity provision and price improvement opportunities for its customers, as specified in the above Public Order Routing Report statistics. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under EDGX’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because EDGX offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to EDGX rather than another venue in order to reach a higher tier. E*TRADE and EDGX do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the EDGX Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to EDGX.
The fees E*TRADE pays and rebates E*TRADE receives from EDGX for NMS equity executions are determined based on EDGX’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by EDGX in the EDGX Fees Schedule, available at http://www.cboe.com/us/equities/membership/fee_schedule/edgx/. Please note that EDGX’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, EDGX paid E*TRADE standard rebate rates of $0.0032 per share for executions priced at $1.00 per share or more and $0.00003 for executions priced below $1.00 per share. Executions that removed liquidity from EDGX qualified for tiered pricing and E*TRADE was not charged a per share fee for executions priced at $1.00 per share or more or charged a per share fee of the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from EDGX in the amount of $107,417 in October, $132,800 in November, and $115,288 in December.
E*TRADE also participates in EDGX’s retail order priority program under which eligible retail orders receive priority ahead of other available interest at a given price level or other enhanced execution benefits. E*TRADE reviews customers’ activity on a periodic basis to determine program eligibility and reserves the right to choose whether to participate in the EDGX’s retail order priority program. E*TRADE is an affiliated company of Morgan Stanley & Co. LLC (“Morgan Stanley”), which is a market maker on EDGX and may realize profits from orders it routes to EDGX for execution. E*TRADE may share indirectly in such profits generated by MS&Co as a result of the corporate affiliation between MS&Co and E*TRADE. E*TRADE and MS&Co order execution volumes are combined on a monthly basis for tiered pricing program incentive purposes. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
Members Exchange (MEMX)
0.30
0.00
0.05
0.97
0.20
0.00
0.0000
-42.15
-15.5944
5516.14
35.0000
433.18
34.2486
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to MEMX LLC (“MEMX”) as specified in the above Public Order Routing Report disclosures. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under MEMX’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because MEMX offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to MEMX rather than another venue in order to reach a higher tier. E*TRADE and MEMX do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the MEMX Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to MEMX.
The fees E*TRADE pays and rebates E*TRADE receives from MEMX for NMS equity executions are determined based on MEMX’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by MEMX in the MEMX Fees Schedule, available at http://info.memxtrading.com/fee-schedule/. Please note that MEMX’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, MEMX paid E*TRADE standard rebate rates of $0.0035 per share for executions priced at $1.00 per share or more and 0.075% of the total trade notional value for executions priced below $1.00 per share. On executions that removed liquidity from MEMX qualified for tiered pricing, E*TRADE was not charged a per share fee for executions priced at $1.00 per share or more nor charged a per share fee for the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from MEMX in the amount of $26,766 in October, $24,122 in November, and $25,656 in December.
E*TRADE is an affiliated company of Strategic Investments I, Inc., both of which are wholly owned subsidiaries of Morgan Stanley and investor-shareholders of MEMX. Accordingly, E*TRADE, both directly and indirectly through its parent company Morgan Stanley and/or its affiliates may share in profits realized by MEMX, which could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to MEMX over other execution venues. Additionally, E*TRADE is an affiliated company of Morgan Stanley & Co., LLC (“MS&Co”), which is market maker on MEMX and may realize profits from orders it routes to MEMX for execution. E*TRADE may share directly or indirectly in any such profits generated by MS&Co. E*TRADE orders routed to MEMX through MS&Co will be combined with any other order flow that MS&Co routes to MEMX for the purpose of determining the applicable pricing under MEMX’s tiered pricing model described above. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
99.31
44.17
10.65
34.54
10.65
CITADEL SECURITIES LLC
28.68
36.22
35.41
15.58
33.19
1048305.28
15.8047
425672.36
6.6265
240998.41
15.2332
192367.31
14.8016
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Citadel Securities LLC (“Citadel”) to facilitate liquidity provision and price improvement opportunities for its customers. Citadel generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Citadel in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Citadel for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Citadel to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Citadel whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Citadel do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Citadel.
There is a potential conflict to a market maker such as Citadel both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Citadel can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Citadel’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Citadel.
In addition to revenues that Citadel may collect for executing or facilitating the execution of E*TRADE customer orders, Citadel also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Citadel to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Citadel’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Citadel receives for executions of E*TRADE customer orders, although Citadel could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Virtu Americas, LLC
25.76
28.27
26.63
21.59
28.00
843355.06
15.9270
311230.68
6.0737
231355.60
16.3497
128352.46
3.4120
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Virtu Americas, LLC (“Virtu”) to facilitate liquidity provision and price improvement opportunities for its customers. Virtu generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Virtu in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Virtu for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Virtu to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Virtu whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Virtu do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Virtu.
There is a potential conflict to a market maker such as Virtu both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Virtu can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Virtu’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Virtu.
In addition to revenues that Virtu may collect for executing or facilitating the execution of E*TRADE customer orders, Virtu also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Virtu to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Virtu’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Virtu receives for executions of E*TRADE customer orders, although Virtu could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
G1 Execution Services, LLC
22.40
14.98
16.68
34.26
20.44
419728.56
15.1016
180824.03
6.8577
455027.04
17.7318
122294.90
17.8548
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to G1 Execution Services, LLC (“G1X”) to facilitate liquidity provision and price improvement opportunities for its customers. G1X generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from G1X in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from G1X for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow G1X to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with G1X whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and G1X do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to G1X.
There is a potential conflict to a market maker such as G1X both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as G1X can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as G1X’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to G1X.
In addition to revenues that G1X may collect for executing or facilitating the execution of E*TRADE customer orders, G1X also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize G1X to route higher percentages of E*TRADE customer orders to particular venues over others, subject to G1X’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates G1X receives for executions of E*TRADE customer orders, although G1X could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Jane Street Capital
10.57
15.88
15.72
2.74
8.81
475391.58
15.6039
197322.60
6.7899
38884.29
17.9639
54183.08
16.0708
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Jane Street Capital (“Jane Street”) to facilitate liquidity provision and price improvement opportunities for its customers. Jane Street generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Jane Street in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Jane Street for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Jane Street to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Jane Street whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Jane Street do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Jane Street.
There is a potential conflict to a market maker such as Jane Street both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Jane Street can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Jane Street’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Jane Street.
In addition to revenues that Jane Street may collect for executing or facilitating the execution of E*TRADE customer orders, Jane Street also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Jane Street to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Jane Street’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Jane Street receives for executions of E*TRADE customer orders, although Jane Street could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Two Sigma Securities, LLC
6.07
2.31
2.98
12.46
4.03
56659.77
13.7488
29391.96
5.1861
206693.94
13.0528
26346.92
19.4198
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to Two Sigma Securities, LLC (“Two Sigma”) to facilitate liquidity provision and price improvement opportunities for its customers. Two Sigma generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Two Sigma in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from Two Sigma for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow Two Sigma to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with Two Sigma whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and Two Sigma do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Two Sigma.
There is a potential conflict to a market maker such as Two Sigma both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as Two Sigma can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as Two Sigma’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to Two Sigma.
In addition to revenues that Two Sigma may collect for executing or facilitating the execution of E*TRADE customer orders, Two Sigma also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize Two Sigma to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Two Sigma’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates Two Sigma receives for executions of E*TRADE customer orders, although Two Sigma could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
UBS Securities, LLC
2.39
2.35
2.21
2.23
3.29
46378.48
15.2758
34304.27
8.1012
41008.10
13.4232
19924.81
15.4883
E*TRADE Securities LLC (“E*TRADE”) routes NMS equity orders to UBS Securities, LLC (“UBS”) to facilitate liquidity provision and price improvement opportunities for its customers. UBS generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from UBS in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.002 per share for non-directed, NMS equity market and marketable limit order executions priced at $1.00 per share or more and $0.0031 per share for non-directed, NMS equity non-marketable limit order executions priced at $1.00 per share or more. E*TRADE does not receive payment from UBS for NMS equity executions priced below $1.00 per share. E*TRADE routes NMS equity orders only to market makers that pay for customer order flow, and all such market makers pay substantially the same rates. In addition, to take advantage of rules adopted by the U.S. securities exchanges that allow retail orders to be eligible for certain potential benefits, including additional price improvement from retail liquidity programs and higher queue priority from retail attestation programs, and to allow UBS to access such potential benefits for E*TRADE customer orders, E*TRADE has entered into a Retail Order Attestation and Agreement with UBS whereby E*TRADE attests that substantially all of its customer orders are agency retail orders. E*TRADE and UBS do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to UBS.
There is a potential conflict to a market maker such as UBS both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, a market maker such as UBS can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. A market maker’s (such as UBS’s) anticipated profit must be allocated among the three subcategories listed above, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by competition for order flow amongst market makers (as measured by the amount of price improvement provided), operating under the same general payment for order flow terms applicable to UBS.
In addition to revenues that UBS may collect for executing or facilitating the execution of E*TRADE customer orders, UBS also receives remuneration from U.S. securities exchanges to which it routes or directs E*TRADE customer orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. exchange rebate payments could, in theory, incentivize UBS to route higher percentages of E*TRADE customer orders to particular venues over others, subject to UBS’s independent order routing and best execution obligations. E*TRADE does not share directly in any such rebates UBS receives for executions of E*TRADE customer orders, although UBS could potentially use these rebates to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Cboe EDGX Exchange, Inc.
1.89
0.00
0.19
5.05
1.18
0.00
0.0000
-1191.71
-5.8751
83096.26
18.4144
0.00
0.0000
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to the Cboe EDGX Exchange, Inc. (“EDGX”) to facilitate liquidity provision and price improvement opportunities for its customers, as specified in the above Public Order Routing Report statistics. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under EDGX’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because EDGX offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to EDGX rather than another venue in order to reach a higher tier. E*TRADE and EDGX do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the EDGX Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to EDGX.
The fees E*TRADE pays and rebates E*TRADE receives from EDGX for NMS equity executions are determined based on EDGX’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by EDGX in the EDGX Fees Schedule, available at http://www.cboe.com/us/equities/membership/fee_schedule/edgx/. Please note that EDGX’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, EDGX paid E*TRADE standard rebate rates of $0.0032 per share for executions priced at $1.00 per share or more and $0.00003 for executions priced below $1.00 per share. Executions that removed liquidity from EDGX qualified for tiered pricing and E*TRADE was not charged a per share fee for executions priced at $1.00 per share or more or charged a per share fee of the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from EDGX in the amount of $107,417 in October, $132,800 in November, and $115,288 in December.
E*TRADE also participates in EDGX’s retail order priority program under which eligible retail orders receive priority ahead of other available interest at a given price level or other enhanced execution benefits. E*TRADE reviews customers’ activity on a periodic basis to determine program eligibility and reserves the right to choose whether to participate in the EDGX’s retail order priority program. E*TRADE is an affiliated company of Morgan Stanley & Co. LLC (“Morgan Stanley”), which is a market maker on EDGX and may realize profits from orders it routes to EDGX for execution. E*TRADE may share indirectly in such profits generated by MS&Co as a result of the corporate affiliation between MS&Co and E*TRADE. E*TRADE and MS&Co order execution volumes are combined on a monthly basis for tiered pricing program incentive purposes. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
The Nasdaq Stock Market
1.87
0.00
0.15
5.12
0.83
0.00
0.0000
-6178.72
-15.3225
63769.43
17.4511
-946.16
-7.3729
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to the Nasdaq Stock Market (“NASDAQ”) to facilitate liquidity provision and price improvement opportunities for its customers, as specified in the above Public Order Routing Report statistics. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under NASDAQ’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because NASDAQ offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to NASDAQ rather than another venue in order to reach a higher tier. E*TRADE and NASDAQ do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the NASDAQ Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to NASDAQ.
The fees E*TRADE pays and rebates E*TRADE receives from NASDAQ for NMS equity executions are determined based on NASDAQ’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by NASDAQ in the NASDAQ Fees Schedule, available at http://www.nasdaqtrader.com/trader.aspx?id=bx_pricing. Please note that NASDAQ’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, NASDAQ paid E*TRADE standard rebate rates of $0.00325 per share for executions priced at $1.00 per share or more and did not pay any per share amount for executions priced below $1.00 per share. Executions that removed liquidity from NASDAQ qualified for tiered pricing and E*TRADE was charged fees of $0.003 per share for executions priced at $1.00 per share or more and 0.30% of the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from NASDAQ in the amount of $86,501 in October, $89,596 in November, and $84,613 in December.
E*TRADE also participates in NASDAQ’s retail order priority program under which eligible retail orders receive priority ahead of other available interest at a given price level or other enhanced execution benefits. E*TRADE reviews customers’ activity on a periodic basis to determine program eligibility and reserves the right to choose whether to participate in the NASDAQ retail order priority program. E*TRADE is an affiliated company of Morgan Stanley & Co. LLC (“MS&Co”), which is a market maker on NASDAQ and may realize profits from orders it routes to NASDAQ for execution. E*TRADE may share indirectly in such profits generated by MS&Co as a result of the corporate affiliation between MS&Co and E*TRADE. E*TRADE and MS&Co order execution volumes are combined on a monthly basis for tiered pricing program incentive purposes. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
Members Exchange (MEMX)
0.36
0.00
0.03
0.97
0.23
0.00
0.0000
-436.57
-9.0421
18881.12
20.9075
1304.29
33.5885
E*TRADE Securities LLC (“E*TRADE”) routes marketable equity orders and non-marketable NMS equity limit orders to MEMX LLC (“MEMX”) as specified in the above Public Order Routing Report disclosures. E*TRADE either pays a fee or receives a rebate for each E*TRADE customer order execution on the exchange, depending on whether the order added to or subtracted from liquidity on the exchange.
The fees and rebates referenced above are subject to volume pricing. To the extent that E*TRADE meets the execution volume thresholds necessary to qualify for preferred pricing under MEMX’s Fees Schedule in a given month, increased (rather than standard) rebate rates and decreased (rather than standard) fees will apply. Because MEMX offers higher rebates and lower fees based on a tiered volume model, there is a potential conflict in that such rebates and fees could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to MEMX rather than another venue in order to reach a higher tier. E*TRADE and MEMX do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules beyond the tiered volume model set forth in the MEMX Fees Schedule as described above; or
D. that require E*TRADE to route any orders or a minimum number of orders to MEMX.
The fees E*TRADE pays and rebates E*TRADE receives from MEMX for NMS equity executions are determined based on MEMX’s tiered volume model. Schedules delineating orders eligible for such rebates and the applicable rates are published publicly by MEMX in the MEMX Fees Schedule, available at http://info.memxtrading.com/fee-schedule/. Please note that MEMX’s publicly available Fees Schedule URL link and applicable rates may change without notice. In general, during Q4 2022, MEMX paid E*TRADE standard rebate rates of $0.0035 per share for executions priced at $1.00 per share or more and 0.075% of the total trade notional value for executions priced below $1.00 per share. On executions that removed liquidity from MEMX qualified for tiered pricing, E*TRADE was not charged a per share fee for executions priced at $1.00 per share or more nor charged a per share fee for the total notional value of executions priced below $1.00 per share. For Q4 2022, E*TRADE received rebates (net of fees) from MEMX in the amount of $26,766 in October, $24,122 in November, and $25,656 in December.
E*TRADE is an affiliated company of Strategic Investments I, Inc., both of which are wholly owned subsidiaries of Morgan Stanley and investor-shareholders of MEMX. Accordingly, E*TRADE, both directly and indirectly through its parent company Morgan Stanley and/or its affiliates may share in profits realized by MEMX, which could, in theory, incentivize E*TRADE to route a higher percentages of E*TRADE customer orders to MEMX over other execution venues. Additionally, E*TRADE is an affiliated company of Morgan Stanley & Co., LLC (“MS&Co”), which is market maker on MEMX and may realize profits from orders it routes to MEMX for execution. E*TRADE may share directly or indirectly in any such profits generated by MS&Co. E*TRADE orders routed to MEMX through MS&Co will be combined with any other order flow that MS&Co routes to MEMX for the purpose of determining the applicable pricing under MEMX’s tiered pricing model described above. It is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing program.
99.96
18.57
8.82
35.18
33.15
CITADEL SECURITIES LLC
35.69
42.12
41.38
41.15
29.38
2652238.65
46.5273
2523070.10
46.6212
1616183.50
44.6167
864197.56
36.6016
E*TRADE Securities LLC (“E*TRADE”) routes U.S.-listed options orders to Citadel Securities LLC (“Citadel”) to facilitate liquidity provision and price improvement opportunities for its customers. Citadel generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Citadel in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.48 per contract for simple and complex equity options orders. E*TRADE does not receive remuneration from Citadel for index options executions or for Professional Customer orders, which are orders of customers who submit an average of 390 options orders per trading day, per calendar month, on a quarterly basis. E*TRADE routes U.S.-listed options orders only (except as indicated in the next sentence) to market makers that pay for customer order flow (and all such market makers pay substantially the same rates). As an exception to the foregoing sentence, E*TRADE routes a limited number of orders to its affiliate, Morgan Stanley & Co. LLC (“MS&Co”), from which E*TRADE does not accept payment. E*TRADE and Citadel do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Citadel.
In general, public, retail, or non-professional index options order execution fees range from $0.00 to $1.32 per contract, depending on the index option class and premium price, with Citadel passing exchange fees for index option executions back to E*TRADE each month. For Q4 2022, E*TRADE paid total fees on customer index options executions of $336,405 in October, $304,046 in November, and $297,288 in December.
There is a potential conflict to an options market maker such as Citadel both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the options market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, an options market maker such as Citadel can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. An options market maker’s (such as Citadel’s) anticipated profit must be allocated among these three sub-categories, such that an increased allocation to any one sub-category will result in a decreased allocation to one or more of the other categories, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by market maker competition for order flow (as measured by the amount of price improvement provided), under the same general payment for order flow terms applicable to Citadel.
In addition to revenues that Citadel may collect for executing or facilitating the execution of E*TRADE customer orders, Citadel may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize Citadel to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Citadel’s independent order routing and best execution obligation. Exchange rebates provided to Citadel for E*TRADE customer order executions by the U.S. options exchanges are not passed through to E*TRADE or its customers although Citadel’s receipt of such rebates could potentially be used to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both. Citadel does not pass through the fees that it is charged by the U.S. options exchanges for E*TRADE customer options order executions, other than the index options fees described above.
Dash/IMC Financial Markets
22.69
15.95
16.34
16.46
37.69
925372.46
42.5605
656247.18
39.6848
553920.43
35.2511
1459432.57
32.8953
E*TRADE Securities LLC (“E*TRADE”) routes U.S.-listed options orders to Dash Financial Technologies, LLC (“Dash”) to facilitate liquidity provision and price improvement opportunities for its customers. Dash generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Dash (based upon the remuneration Dash receives from the liquidity providers with which it has arrangements as described below) (i.e. payment for order flow) in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.48 per contract for simple and complex equity options orders. E*TRADE does not receive remuneration from Dash for index options executions or for Professional Customer orders, which are orders of customers who submit an average of 390 options orders per trading day, per calendar month, on a quarterly basis. E*TRADE only routes U.S.-listed options orders to market makers that pay for customer order flow, and all such market makers are subject to substantially the same rate of payment, apart from a limited number of orders, which E*TRADE routes to its affiliate Morgan Stanley & Co., LLC (“MS&Co”), from which E*TRADE does not accept payment. E*TRADE and Dash do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Dash.
In general, public, retail, or non-professional index options order execution fees range from $0.00 to $1.32 per contract depending on the index option class and premium price, with Dash passing exchange fees for index option executions to E*TRADE each month. For Q4 2022, E*TRADE paid total fees on customer index option executions of $441,171 in October, $597,955 in November, and $570,683 in December.
In connection with Dash ’s handling of E*TRADE retail equity option orders, Dash has arrangements with multiple, unaffiliated liquidity providers, including IMC Financial Markets, designed to facilitate liquidity provision and price improvement opportunities. Pursuant to these arrangements, Dash routes E*TRADE retail equity options orders to exchanges and may preference the liquidity providers on such applicable exchange, consistent with exchange-sponsored programs which are described in the fee schedules of each such options exchange. The liquidity providers provide Dash with remuneration in connection with Dash ’s routing of E*TRADE retail equity options orders, including through reciprocal order flow arrangements between Dash and such liquidity provider and/or payment per contract to Dash in return for E*TRADE retail equity options orders that Dash routes or directs. Dash provides payment to E*TRADE as described above based upon the compensation Dash receives from such liquidity providers.
There is a potential conflict to Dash and/or the liquidity provider to which Dash routes orders both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the liquidity provider seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, the liquidity provider can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay Dash (and for Dash, in turn, to pay E*TRADE) for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. The liquidity provider’s anticipated profit must be allocated among these three sub-categories, such that an increased allocation to any one sub-category will result in a decreased allocation to one or more of the other categories. Dash and the liquidity provider can also adjust the amount of profit that the liquidity provider shares with Dash. The allocation of resources between the three subcategories listed above, including the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders is mitigated by market maker competition for order flow (as measured by the amount of price improvement provided), under the same general payment for order flow terms applicable to Dash.
In addition to revenues that Dash may collect for executing or facilitating the execution of E*TRADE customer orders, Dash may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize Dash to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Dash’s independent order routing and best execution obligations. Exchange rebates provided to Dash for E*TRADE customer executions by the U.S. options exchanges are not passed through to E*TRADE or its customers. Dash and/or its liquidity provider does not pass through the fees charged by the U.S. options exchanges for E*TRADE customer executions, other than the index options fees described above. E*TRADE does not share directly in any profits from U.S. options exchange rebates for executions of E*TRADE customer orders, although Dash’s and/or its liquidity provider’s receipt of such rebates could potentially be used to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both.
Global Execution Brokers LP
21.28
26.70
26.20
25.93
1.86
1682443.65
46.8398
1299727.76
46.5003
1218007.37
45.5644
547618.04
35.0105
E*TRADE Securities LLC (“E*TRADE”) routes U.S.-listed options orders to Global Execution Brokers LP (“G1X”) to facilitate liquidity provision and price improvement opportunities for its customers. G1X generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from G1X in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.48 per contract for simple and complex equity options orders. E*TRADE does not receive remuneration from G1X for index options executions or for Professional Customer orders, which are orders of customers who submit an average of 390 options orders per trading day, per calendar month, on a quarterly basis. E*TRADE only routes U.S.-listed options orders to market makers that pay for customer order flow, and all such market makers are subject to substantially the same rate of payment, apart from a limited number of orders, which E*TRADE routes to its affiliate Morgan Stanley & Co., LLC (“MS&Co”), from which E*TRADE does not accept payment. E*TRADE and G1X do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to G1X.
In general, public, retail, or non-professional index options order execution fees range from $0.00 to $1.32 per contract, depending on the index option class and premium price, with G1X passing exchange fees for index option executions back to E*TRADE each month. For Q4 2022, E*TRADE paid total fees on customer index options executions of $201,391 in October, $169,759 in November, and $174,665 in December.
There is a potential conflict to an options market maker such as G1X both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the options market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, an options market maker such as G1X can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. An options market maker’s (such as G1X’s) anticipated profit must be allocated among these three sub-categories, such that an increased allocation to any one sub-category will result in a decreased allocation to one or more of the other categories, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by market maker competition for order flow (as measured by the amount of price improvement provided), under the same general payment for order flow terms applicable to G1X.
In addition to revenues that G1X may collect for executing or facilitating the execution of E*TRADE customer orders, G1X may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize G1X to route higher percentages of E*TRADE customer orders to particular venues over others, subject to G1X’s independent order routing and best execution obligation. Exchange rebates provided to G1X for E*TRADE customer order executions by the U.S. options exchanges are not passed through to E*TRADE or its customers although G1X’s receipt of such rebates could potentially be used to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both. G1X does not pass through the fees that it is charged by the U.S. options exchanges for E*TRADE customer options order executions, other than the index options fees described above.
Wolverine Execution Services, LLC
20.15
15.24
16.07
16.42
30.55
885200.93
48.5310
735174.44
46.2412
750964.86
47.9612
1474746.00
48.8012
E*TRADE Securities LLC (“E*TRADE”) routes U.S.-listed options orders to Wolverine Execution Services, LLC (“Wolverine”) to facilitate liquidity provision and price improvement opportunities for its customers. Wolverine generates revenue from executing or facilitating the execution of E*TRADE customer orders. In exchange for such routing, E*TRADE receives payments from Wolverine in the amounts outlined in the above Public Order Routing Report disclosures (i.e. payment for order flow), calculated at a rate of $0.48 per contract for simple and complex equity options orders. E*TRADE does not receive remuneration from Wolverine for index options executions or for Professional Customer orders, which are orders of customers who submit an average of 390 options orders per trading day, per calendar month, on a quarterly basis. E*TRADE only routes U.S.-listed options orders to market makers that pay for customer order flow, and all such market makers are subject to substantially the same rate of payment, apart from a limited number of orders, which E*TRADE routes to its affiliate Morgan Stanley & Co., LLC (“MS&Co”), from which E*TRADE does not accept payment. E*TRADE and Wolverine do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to Wolverine.
In general, public, retail, or non-professional index options order execution fees range from $0.00 to $1.32 per contract, depending on the index option class and premium price, with Wolverine passing exchange fees for index option executions back to E*TRADE each month. For Q4 2022, E*TRADE paid total fees on customer index options executions of $1,002,668 in October, $924,456 in November, and $897,898 in December.
There is a potential conflict to an options market maker such as Wolverine both paying for order flow and providing price improvement, as the potential source of funds for each is the same, namely the anticipated profit the options market maker seeks to earn from executing or facilitating the execution of E*TRADE customer orders. Accordingly, from such anticipated profit, an options market maker such as Wolverine can (i) forgo a portion of such anticipated profit to provide price improvement; (ii) forgo a portion of such anticipated profit to pay for order flow; or (iii) retain a larger portion of anticipated profit and not provide (or provide less) price improvement or not provide (or provide less) payment for order flow. An options market maker’s (such as Wolverine’s) anticipated profit must be allocated among these three sub-categories, such that an increased allocation to any one sub-category will result in a decreased allocation to one or more of the other categories, with the risk of overallocation to market maker profits at the expense of providing price improvement on E*TRADE customer orders mitigated by market maker competition for order flow (as measured by the amount of price improvement provided), under the same general payment for order flow terms applicable to Wolverine.
In addition to revenues that Wolverine may collect for executing or facilitating the execution of E*TRADE customer orders, Wolverine may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates. Although E*TRADE has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize Wolverine to route higher percentages of E*TRADE customer orders to particular venues over others, subject to Wolverine’s independent order routing and best execution obligation. Exchange rebates provided to Wolverine for E*TRADE customer order executions by the U.S. options exchanges are not passed through to E*TRADE or its customers although Wolverine’s receipt of such rebates could potentially be used to provide price improvement to E*TRADE customers, order flow payments to E*TRADE, or both. Wolverine does not pass through the fees that it is charged by the U.S. options exchanges for E*TRADE customer options order executions, other than the index options fees described above.
Morgan Stanley & Co., LLC
0.19
0.00
0.02
0.04
0.52
0.00
0.0000
0.00
0.0000
0.00
0.0000
0.00
0.0000
E*TRADE Securities LLC (“E*TRADE”) is an affiliate of Morgan Stanley & Co., LLC. (MS&Co). E*TRADE sends orders in U.S.-listed options to MS&Co to facilitate liquidity provision and price improvement opportunities for its customers. E*TRADE orders in U.S.-listed options that are sent to MS&Co are then routed by MS&Co to a U.S. options exchange to be either crossed or executed against MS&Co interest and/or other liquidity on such exchanges, subject to the principles of best execution. MS&Co generates revenue from executing or facilitating the execution of E*TRADE customer orders. E*TRADE does not receive payments from MS&Co for the orders it routes to MS&Co and E*TRADE and MS&Co do not have any arrangements:
A. that require E*TRADE to meet certain volume thresholds or that provide incentives to E*TRADE for meeting or exceeding certain volume thresholds;
B. that require E*TRADE to meet certain minimum volume thresholds or that provide disincentives to E*TRADE for failing to meet certain minimum volume thresholds;
C. for volume-based tiered payment schedules; or
D. that require E*TRADE to route any orders or a minimum number of orders to MS&Co.
In the course of providing liquidity, MS&Co may preference option orders to MS&Co’s options market maker or third-party market makers on the applicable exchange, consistent with exchange-sponsored programs which are described in the fee schedules of each such options exchange. MS&Co also participates in exchange-sponsored listed option payment for order flow programs under which MS&Co may also receive remuneration from the U.S. options exchanges to which it routes or directs E*TRADE customer options orders in the form of rebates, including from exchanges in which E*TRADE’s parent company Morgan Stanley or another affiliated entity may have a financial interest. Although MSSB has no knowledge of any facts to suggest that such is the case, these U.S. options exchange rebate payments could, in theory, incentivize MS&Co to route higher percentages of E*TRADE customer orders to particular venues over others, subject to MS&Co’s independent order routing and best execution obligations. Exchange rebates provided and fees charged to MS&Co for E*TRADE customer executions by the U.S. options exchanges are not passed through to E*TRADE or its customers. However, E*TRADE is an affiliated company of MS&Co, which is a market maker on various U.S. options exchanges and MS&Co may realize market-making profits from E*TRADE orders routed to MS&Co for execution. In addition, E*TRADE orders that MS&Co executes are combined on a monthly basis with other order flow that MS&Co executes for tiered pricing program incentive purposes and it is possible that MS&Co could generate additional profit as a result of the combination of such order flow and the incentives of such tiered pricing programs. As a result of E*TRADE’s corporate affiliation with MS&Co, E*TRADE may share indirectly in any such profits (whether from market-making, from pricing programs, or otherwise) generated by MS&Co.