A debate about how online brokerages execute trades.

CyBerCorp (Austin, Texas) will unveil its new Internet-based trading system this weekend. The CyBerXchange system is designed to electronically route orders to the trading venue offering the best price. When it comes to Nasdaq stocks, the list includes various systems operated by Nasdaq and a host of systems called Electronic Communication Networks. Most online investors see the best possible price on their PC screens, but few know how their trade is consummated. Top online brokers such as E-Trade and Ameritrade receive orders from customers, then often sell the orders to another company, called a market maker. The market maker then executes the orders. E-Trade, for example, gets about $2.90 per trade, which supplements the $19.95 it charges customers for Nasdaq trades. CyBerCorp CEO Philip Berber charges that these brokerages fail to give their customers the best price because they would rather sell to a third party for the extra revenue. Berber says CyBerCorp will not accept payment for order flow. Investors will benefit by being routed to the venue offering the best price, he says. An investor buying 1,000 shares at 1/8 of a dollar cheaper saves $125. But Berber says that investors, especially active traders, will benefit more over time from better prices. E-Trade officials say their business model envisions revenue from order-flow payments to dwindle.