Ustocktrade has a unique trading platform that internalizes all customer orders. This means we trade at or inside the NBBO (the consolidated best bid and offer prices across all the public exchanges) but we do not route customer orders out to the public exchanges. This model helps us to avoid many of the clearing and exchange fees of other broker-dealers, allowing us to only charge $1 per trade. Additionally, since the buyer and seller are both on our platform, we can provide T+0 settlement.
Providing T+0 settlement means we must have shares to deliver on the day the trade is executed. If the shares are not available, the stock will be designated as limited liquidity and while users temporarily may not be able to buy this stock, they are always able to sell a stock designated as Limited Liquidity.
If Ustocktrade is able to obtain a finite number of shares, that inventory will be available as liquidity for buy orders, and once utilized, the stock will then be designated as “Limited Liquidity”.
If a Limited Liquidity stock is sold by Users, those shares are available to be purchased by other users, and the symbol will no longer be designated as Limited Liquidity.
As a result of these scenarios, you may see certain stocks fluctuate to and from Limited Liquidity throughout the day as Users buy and sell.
Some of the common characteristics of symbols which have a higher probability of being designated as Limited Liquidity:
- Stocks with a small market capitalization
- Stocks with a small amount of shares outstanding
- Stocks with a small amount of shares in the public float
- Stocks with limited trading activity
- Stocks which have had a reverse stock split recently
- Stocks designated as Threshold Stocks by the Exchanges