Fidelity is somewhat vague on this and I don’t see any good documentation relating to it. They have all these statistics about how awesome they are and how much they save me when I’m trading but very little in the ways of facts I can digest to confirm for myself.
Any help guidance on this (regarding the industry at large, not just fidelity) would be very helpful. Thank you
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Let’s say that I own a brokerage. I list a share of A-Corp on the site for $5. This price comes from the stock exchange. This number is the highest price that a share of A-Corp was sold for, because I’m required by law to guarantee this price.
You think: Hey, I want to buy a share for $5! You place an order through my brokerage.
Now, I have to get you those shares. However, I’m a major financial player. There are other major companies called market makers that often *need* stocks at very specific times, or can give “discounts” if I purchase large amounts of stock. I can often save money on my purchases or sales using methods like these. If I do so, it would be known as a price improvement.
Bottom line is that you get your stock for cheaper than you anticipated.
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