If you agree to net trading as part of your Execution Services Agreement (or on an order-by-order basis as required by us), you authorize us to execute not held orders as principal on a net basis. When executing orders on a net basis, we accumulate a position in a principal account to fill your order and then executes your order at a price(s) that is typically above its average accumulation cost in the case of a buy order or below its average accumulation cost in the case of a sell order. The difference between our average cost to accumulate a position to fill your order and the price reported to you and the consolidated tape is compensation to us for executing your order. The amount of this compensation is not disclosed on your trade confirmation or other report. Details regarding the individual executions used to fill your order(s) are available upon request. We may incur a profit (or sustain a loss) in its proprietary account as a result of executing trades on a net basis. For orders traded on a net basis, you will receive an execution at or better than your limit price.
