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This is wrong. People (Citadel) buy for only one reason. They can make money off of it. Take a look at this link. Trade execution improved in the UK when they

This is wrong. People (Citadel) buy for only one reason. They can make money off of it. Take a look at this link. Trade execution improved in the UK when they made PFOF illegal. https://www.cfainstitute.org/en/advocacy/policy-positions/payment-for-order-flow-in-the-united-kingdom https://www.cfainstitute.org/en/advocacy/policy-positions/pa... Robhinhood cancels decision to enter UK. https://www.cnbc.com/2020/07/21/robinhood-scraps-launch-of-its-investing-app-in-the-uk.html https://www.cnbc.com/2020/07/21/robinhood-scraps-launch-of-i...

gruez 6y ago
>This is wrong. People (Citadel) buy for only one reason. They can make money off of it. That doesn't mean they're making money at your expense. Random hn comment that explained it better than I could: https://news.ycombinator.com/item?id=23774476 https://news.ycombinator.com/item?id=23774476
- afrojack123 6y ago
  No, they are stop hunting.
  - gruez 6y ago
    Care to elaborate?
    - afrojack123 6y ago
      Sure. The trading is done in lower volume assets like non S&P 500 and Options market. This is actually the orders where Robinhood gets most of its money. Say you put up trades and stop loss and trailing stop loss. These orders are sent to and purchased by Robinhoods customers (Citadel and Virtu). Citadel and Virtu act like dealers. They take the opposite side of your trade and also know where your stop losses are. Because these are lower volume stocks, they can push prices around, force you to sell at a loss and then prices go back to where they were a few moments ago. https://www.jstor.org/stable/2962317?seq=1 https://www.jstor.org/stable/2962317?seq=1 This link describes what is going on. This happens all the time in forex markets. During lower volume periods, they go after the stop losses. Only market where this doesn't really happen is futures because all trades occur on a centralized exchange. My recommendation switch to a broker like Tradestation and route your trades through the IEX exchange to avoid getting duped.
      - tcbawo 6y ago
        Customer orders are tagged in the market (thus available to all participants) due to laws governing market participant behavior. These orders are essentially static, while all other institutional orders with direct market access are fluid. Customer orders are profitable in aggregate in the same way playing professional poker is profitable: a constant stream of less equipped/informed money.
neximo64 6y ago
The Uk example you’ve given is terrible. Trade execution at the quotes given (that last 30 seconds) improved. In the uk quoting is done by an RSP but It doesn’t mean the price the customer got in the end improved looking at the main board or dark pools (which you can’t see). They mention it in the conclusion of the PDF. What it implies is price changes with payment for order flow the order won’t executed and is requoted, whereas where it’s banned there’s no incentive to cancel so you get the quote.

gruez 6y ago

>This is wrong. People (Citadel) buy for only one reason. They can make money off of it. That doesn't mean they're making money at your expense. Random hn comment that explained it better than I could: https://news.ycombinator.com/item?id=23774476 https://news.ycombinator.com/item?id=23774476

afrojack123 6y ago
No, they are stop hunting.
- gruez 6y ago
  Care to elaborate?
  - afrojack123 6y ago
    Sure. The trading is done in lower volume assets like non S&P 500 and Options market. This is actually the orders where Robinhood gets most of its money. Say you put up trades and stop loss and trailing stop loss. These orders are sent to and purchased by Robinhoods customers (Citadel and Virtu). Citadel and Virtu act like dealers. They take the opposite side of your trade and also know where your stop losses are. Because these are lower volume stocks, they can push prices around, force you to sell at a loss and then prices go back to where they were a few moments ago. https://www.jstor.org/stable/2962317?seq=1 https://www.jstor.org/stable/2962317?seq=1 This link describes what is going on. This happens all the time in forex markets. During lower volume periods, they go after the stop losses. Only market where this doesn't really happen is futures because all trades occur on a centralized exchange. My recommendation switch to a broker like Tradestation and route your trades through the IEX exchange to avoid getting duped.
    - tcbawo 6y ago
      Customer orders are tagged in the market (thus available to all participants) due to laws governing market participant behavior. These orders are essentially static, while all other institutional orders with direct market access are fluid. Customer orders are profitable in aggregate in the same way playing professional poker is profitable: a constant stream of less equipped/informed money.

neximo64 6y ago

The Uk example you’ve given is terrible. Trade execution at the quotes given (that last 30 seconds) improved. In the uk quoting is done by an RSP but It doesn’t mean the price the customer got in the end improved looking at the main board or dark pools (which you can’t see). They mention it in the conclusion of the PDF. What it implies is price changes with payment for order flow the order won’t executed and is requoted, whereas where it’s banned there’s no incentive to cancel so you get the quote.