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Every article I read on the topic has a plug for IEX, an exchange that "refuses to pay kickbacks" which make me think that these peices are basically advertisem
by bko 9y ago
Every article I read on the topic has a plug for IEX, an exchange that "refuses to pay kickbacks" which make me think that these peices are basically advertisements. Either kick backs serve no purpose and IEX will thrive especially in this environment where where investors are clamoring for yield. Or it does have some purpose or is not significant. Putting in regulations would likely lead to more complexity and regulatory capture
- harryh 9y agoKickbacks to brokers that are sending out retail flow allow those brokers to reduce commissions on trading. These reductions have gone all the way to zero in a lot of places.
- chollida1 9y ago> Kickbacks to brokers that are sending out retail flow allow those brokers to reduce commissions on trading. These reductions have gone all the way to zero in a lot of places. I think you are wrong here. Most consumer orders are active meaning typically the broker would pay the maker fee instead of collecting a kick back. I mean, inverted exchanges are a thing but do very little volume. Now pay for order flwo from wholesalers like Citadel is a big win for brokerages and does help to reduce trading fees.