In addition to paying standard commissions on your trades, you may at times be charged an Electronic Communication Networks (ECNs) or Alternative Trading Systems (ATSs) fee. ECNs and ATSs charge a service fee for matching buyers and sellers who trade on their exchange and networks. Rather than splitting standard trade commissions, ECN, and ATS fees into different categories, we combine and show them all as ‘commissions’.

As shown in the table below, these fees apply on a per-share basis and typically carry a very small charge. For example, on an order of 460 shares of a Canadian listed security (trading above $1.00), the fee will only be $1.61 [$0.0035 (Fee) x 460 (# of shares) = $1.61].

The good news is that ECN/ATS fees don’t necessarily apply on every trade. Let’s learn when they apply and how these fees can be avoided.

ECN fees are charged when placing a buy or sell orders that are considered to be “removing liquidity” or in other words when placing orders that will likely to be executed right away. This includes market orders, where the trader accepts the current best available price in the market when buying or selling shares or when placing marketable limit orders where investors specify a limit price that is either above the ask (when buying) or below the bid (when selling) typically causing the order to fill immediately.

On the other hand, when placing non-marketable limit orders where the limit price is lower than the Ask (when buying) or higher than the Bid (when selling), your order is likely to be longer in the queue waiting for somebody to agree to the price being offered. By doing that, you’re considered to be “adding liquidity” to the market, and therefore ECN/ATS will not apply in that scenario.