Stock exchanges derive revenue from a variety of sources, one such source is transaction charges or the rebate system. This incentive based transaction model is an important consideration for professionals and HFT, but less so for the discount based investor/trader. In addition to generating revenue for exchanges, rebates are also a contributing factor in market structure and trading activity.
While rebate based transaction models are common throughout the industry, this commentary will focus on Canada's major markets, the TSX and Venture.
What are trading fees and rebates?
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