We were paid kick backs for order flow from third markets, and paid floor fees to execute on the floor. But as I mentioned before, our clients were not young penny stocks or options traders. They bought and held forever United Health or IBM. We did have one stock that went wild in which we had a concentrated position and made a bad week for me and retail got blown out.
I got yelled at for sending order flow to the floor, our CFO didn't like paying the bill. But some times, getting better executions for the client retains clients. If I can clip a 1/4 point on a $1 million trade, that makes a happy client. The broker makes commission, the client saves $, and if the client buys $1 million of equity, he/she has fixed income securities that pays income, commission to the the fixed income trader and broker, retains assets on the books, and wealth management fees and margin interest.
I explained this to my CFO and COO every time they yelled at me for directing order flow to the floor and told them to STFU and get out of my office. They knew I was right, just didn't wan't to send checks to the NYSE.
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