Web Street Chairman Joseph Fox says his firm makes its money by accepting payments from market makers for orders it routes to them. The market makers, in turn, earn their profit from the small gap between bid and asked prices. For active traders, quality of execution is the No. 1 concern. This is a murky area. Sometimes, trading problems occur because of heavy market volume.
Stock prices can move so fast that order executions lag badly behind price fluctuations.
When this happens, limit orders are smart. Even though they typically cost extra, they let you set a limit for the price at which you wish to buy or sell a stock. Also, many brokers have had system problems that have left traders in the lurch. Securities regulators have received thousands of complaints about slow Web-site response times, inadequate phone support, and problems getting trades executed online. Yet another issue is whether brokers are giving investors the best prices on trades.