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Well of course. No matter whether a large group of people act in a certain way on the stock market for good or bad reasons, it behooves actual professionals to

Well of course. No matter whether a large group of people act in a certain way on the stock market for good or bad reasons, it behooves actual professionals to be informed. So if a single source of information moves the market in one way, whether based on actual insights or just good old fashioned self serving "I bought at X, let's influence others so the value goes up" tactics, people in the business should know. It's like being amazed that tech people all seemingly go to a message board run by a single venture capital firm to congregate, even if the number of users who have an actual business agreement with said firm is essentially a rounding error of the total.

swyx 6y ago
2-3 years ago it was the Wealthfronts and Betterments of the world ruling the roost. the conventional wisdom is that most traders lose money and would be better off putting it into ETFs and mutual funds and it seemed to be winning. Bloomberg wrote fret pieces about whether there'd be anybody left to trade. now it's reversing, degeneracy is on the rise, and individual traders are 20% of equity trading volumes. That's whats nonobvious. saying "well of course" dismisses this broader trend which is the institutional validation of something that's been extremely nonobvious.
- dd36 6y ago
  Thx Robinhood. Plus Robinhood partners get to front all of those trades anyways, right?
  - JumpCrisscross 6y ago
    > Robinhood partners get to front all of those trades If you give me, your broker, an order to buy 100 shares of Apple, and I buy Apple stock before executing your order, that's front running. If you give me, your market maker, an order to buy 100 shares of Apple and I sell them to you out of my inventory, I'm making a market, not front running. If you give me, your execution partner, an order to buy 100 shares of Apple and I sell them to you at the national best offer (NBBO) while simultaneously or immediately thereafter buying them somewhere else for a lower price, I'm giving you execution for a price, not front running.
    - dd36 6y ago
      The point is they’re not buying from an exchange. It’s all being middled for margin and harvested for data to cover the execution cost.
      - JumpCrisscross 6y ago
        > they’re not buying from an exchange Most trades haven’t been executed on exchanges since at least the 90s. Sophisticated investors are fine with this. They often seek out off-exchange execution for a variety of benefits. The problem with Robinhood isn’t how it executes trades. It’s the kind of trading it encourages. It’s not in the shadows, it’s front and center in the UI.
- throw0101a 6y ago
  > the conventional wisdom is that most traders lose money and would be better off putting it into ETFs and mutual funds and it seemed to be winning. Bloomberg wrote fret pieces about whether there'd be anybody left to trade. Don't worry, even if (say) 90% of invested money is in passive index funds, you only need a few active folks to keep things running: * https://en.wikipedia.org/wiki/Grossman-Stiglitz_Paradox https://en.wikipedia.org/wiki/Grossman-Stiglitz_Paradox If some AI/ML system notices a discrepancy that can be exploited it will do so.

swyx 6y ago

2-3 years ago it was the Wealthfronts and Betterments of the world ruling the roost. the conventional wisdom is that most traders lose money and would be better off putting it into ETFs and mutual funds and it seemed to be winning. Bloomberg wrote fret pieces about whether there'd be anybody left to trade. now it's reversing, degeneracy is on the rise, and individual traders are 20% of equity trading volumes. That's whats nonobvious. saying "well of course" dismisses this broader trend which is the institutional validation of something that's been extremely nonobvious.

dd36 6y ago
Thx Robinhood. Plus Robinhood partners get to front all of those trades anyways, right?
- JumpCrisscross 6y ago
  > Robinhood partners get to front all of those trades If you give me, your broker, an order to buy 100 shares of Apple, and I buy Apple stock before executing your order, that's front running. If you give me, your market maker, an order to buy 100 shares of Apple and I sell them to you out of my inventory, I'm making a market, not front running. If you give me, your execution partner, an order to buy 100 shares of Apple and I sell them to you at the national best offer (NBBO) while simultaneously or immediately thereafter buying them somewhere else for a lower price, I'm giving you execution for a price, not front running.
  - dd36 6y ago
    The point is they’re not buying from an exchange. It’s all being middled for margin and harvested for data to cover the execution cost.
    - JumpCrisscross 6y ago
      > they’re not buying from an exchange Most trades haven’t been executed on exchanges since at least the 90s. Sophisticated investors are fine with this. They often seek out off-exchange execution for a variety of benefits. The problem with Robinhood isn’t how it executes trades. It’s the kind of trading it encourages. It’s not in the shadows, it’s front and center in the UI.
throw0101a 6y ago
> the conventional wisdom is that most traders lose money and would be better off putting it into ETFs and mutual funds and it seemed to be winning. Bloomberg wrote fret pieces about whether there'd be anybody left to trade. Don't worry, even if (say) 90% of invested money is in passive index funds, you only need a few active folks to keep things running: * https://en.wikipedia.org/wiki/Grossman-Stiglitz_Paradox https://en.wikipedia.org/wiki/Grossman-Stiglitz_Paradox If some AI/ML system notices a discrepancy that can be exploited it will do so.