Trading with Focus – Why you can probably only see part of the market

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A short one today, I promise.

Back in the day where stockbrokers wore three-piece pinstripes and had titles bestowed by royalty and weekend hunting estates, and street urchins were thrown ha’pennies for chalking in the latest prices for the companies that were traded on the Australian Stock Exchange, there were only two sources for today’s listed company prices.

The guy who had to cover the mortgage on the hunting estate, and tomorrow’s newspaper.

Then, along came the internet, and IRESS put the prices into code, and the street urchins out of a job.

A few years later, the ASX listed on itself, and its shareholders (like all shareholders) expect profit growth. So the ASX charges people to look at live prices. And live news. And old prices. And old news. And to get the data stream. And if you get the data stream from anywhere that isn’t directly from the ASX.

So as a trader, there’s a few ways you can pay to access that price data.

  1. By having it included in the costs of your brokerage. And make it click-to-refresh so you don’t use a lot of it, to keep their costs down.
  2. By not getting access to it at all, because it’s cheaper, like some who I won’t name and shame
  3. By paying a subscription to get all the data live-streamed and then getting really cheap brokerage – like we do

A few years ago, in order to bring competition into a market that was now a monopoly, the government brought in Chi-X. Chi-X data fees for retail trader are 50% of those of the ASX, but now, you have two exchanges trading all the shares you had on the ASX. According to Chi-X’s website, they’ve accounted for about 23% of the volume of the total market volumes at times, so if you only looked at Chi-X you wouldn’t see much of the trade.

So a real trader, who needs to know true volumes on bid/ask & traded, or a technical analyst, who needs to know tick-prices for their mathematical models, and YOU, who want to make sure you’re not missing out on the best price to the expense of the professionals, now has a few choices.

  1. Pay the higher brokerage rates
  2. Look at the prices from 20 minutes ago
  3. Look at only the Chi-X live prices
  4. Pay for all the live data like an all-you-can-eat buffet, and get really cheap brokerage

So, I’ll start with an rambling apology.

We launched just after Covid hit and had to rush to get a product to market. It was hard. The first of the Robinhood gambling apps came to market around the same time, and went viral. To start with, they were proposing ‘delayed prices for free’, but only offering ‘market’ orders. Imagine! You don’t know what the price is now, but you have to pay it regardless… based on what it was 20 minutes ago.

So we went into belly-ache mode about how that was not really an appropriate thing to do to impressionable first time investors who were facing down a global pandemic, and by the time their ‘initial free live-prices offer’ ended they realised that their pooled fund model was highly profitable if people moved in herds, which they were, so they could afford to absorb the click-to-refresh prices. Phew!

Recently, someone undercut them again! $3 a trade – on HIN! With live prices!! But, not the ASX live prices. So, it’s better, as it’s not pooled, but it’s still only showing you part of the ‘story’. And only on the top stocks, as Chi-X don’t always do a lot of volume in the speccy stuff.

We went a different direction. Full live-streaming ASX pricing. No margin on the brokerage, we just passed on the cost of placing the trade. We put a $20 margin on the top of the cost of ASX data for the month, so for $45 a month you could have a professional grade live-streaming platform on PC and app with heavy technical charts on HIN, with your own bank account where you keep your interest (because most of them keep your interest too). And $5 or 0.02% trades.

What we didn’t do immediately, because we had so much else to do, was connect to the Chi-X. (Soz.)

(Don’t get me wrong, all of your orders on Marketech already rout to the Chi-X and ASX centerpoint and the Chi-X and ASX market as per the ASX Best routing policies – even if you don’t see the trades in the platform you can still see the activity in your trade logs to tell you where it traded and at what price.)

So, we are rectifying that. ASAP!

Stage 1 – (as soon as next week) you’ll be able to trade all the ETFs that are only listed on Chi-X. And there’s some cool and funky crypto and blockchain stuff on there that some people obviously like.

Stage 2 – the option of having both ASX live-streaming data and the Chi-X live-streaming data blended together, so you can see the whole market. All the depth. All the trades. We might even be able to let you choose to trade on the centrepoint by then…

And the delayed prices, but not ‘just the delayed prices’. Or just Chi-X. But the whole damn lot!

I wanted to apologise because I sit up here on my high horse and say we’re giving you the professional tools you need, and yet, due to (excuses, such as) building in all the other cool features we wanted and integrating Sharesight and building client feature requests and trying to get you some quality research and advice (and now trying to integrate it) and connecting the NSX (because no-one else would support them) we haven’t yet connected the Chi-X data.

So in the not to distant future, probably only a few months away, definitely after we release the multi-screen/multi-chart thing we’re working on, but probably very soon after that – we’ll let you decide whether you want Chi-X full blended data too.

Then you’ll be able to use a platform almost identical in function to those that the true professionals use. But also on your mobile. And for 15x less in brokerage than most instos pay their brokers, and instead of it being around $1000 a month for our main competitor, it’ll be $60.

Killing it.

Oh, and this is getting tiring…we should have more news big news for you in the next few days too! (apparently we’re not taking breaks til we’ve finished our own ‘race to the best’!)

At Marketech our platform is about technology, providing you the tools and technology to trade.  We encourage our high-function trading platform to get you live pricing, live charts, live market depth to ensure you have the tools and trading capability at your fingertips, and on your mobile phone or PC.

You trade your own stock on your individual HIN. It is your cash in your own Macquarie account where you keep the competitive interest you earn.

Our subscribers get access to brokerage starting at $5, and then 0.02 per cent for trades over $25k.  If you want to trade the market, you need immediate access wherever you are and the seamless Marketech mobile app means you are live anywhere anytime.

Marketech Focus subscribers also get 2-months free access to the ‘Marcus Today’ newsletter to help you with your investing and trading goals.

Go to www.marketech.com.au to set up a free trial – you will be astounded by the simplicity and tools that this technology gives you.  No spin, just low-cost trading and the tools that give you advantage over hype.

This article was developed in collaboration with Marketech Online Trading Pty Ltd (ACN 654 674 432), an Authorised Representative (1293528) of Sanlam Private Wealth Pty Ltd (AFSL 337927), and a Stockhead advertiser at the time of publishing.

All information and material contained herein is general in nature and does not consider your financial situation, investment needs or objectives.
The information does not constitute personal financial advice, nor a recommendation or opinion that a security or service is appropriate for you.
You should seek independent and professional tax and financial advice before making any decision based on this information.