Aggressive Execution of Your Order

BarterSecurities orders combine a traditional buy and a traditional sell order, to be executed simultaneously (barter order). For example, your barter order might be to buy IBM and sell INTC in roughly equal dollar amounts, each leg contingent on the other. Since your trade is roughly dollar-neutral, a marketmaker who takes the other side sustains little overall market risk and/or hedging cost. Because of the highly favorable risk/return characteristics of barter orders, marketmakers are willing to compete aggressively for them, resulting in better prices for you.

Moreover, your orders may be matched and executed against barter orders that have been placed by other customers. Many orders may be combined to make one execution. For example, an order to sell IBM and buy INTC, an order to sell INTC and buy CSCO, and an order to sell CSCO and buy IBM, could form a three-way internal match. These trades are likely to be executed between marketmakers bids and offers, which greatly benefits each of the customers involved.

Less Market Risk and No Adverse Selection

In a falling market, there is always the risk that traditional buy orders are filled while sell orders remain open (and vice versa in a rising market), leading to losses even before you get your full position on. BarterSecurities orders eliminate this risk by requiring the buy and sell sides to be filled simultaneously, or not at all. You start out ahead of the game.

In another scenario even a single traditional limit buy order is biased against you because it tends to be filled if the stock falls (hurting you) but tends to remain unfilled if the stock rises (also hurting you). BarterSecurities eliminates this adverse selection by allowing you to trade from the Limit Order Book (with a single mouse-click) while NOT showing your limit price.