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Yes, Robinhood disclosed that Citadel's MM desk accounted for the largest portion of their payment for order flow income in their rule 606 disclosures. But stil
by tylerhou 6y ago
Yes, Robinhood disclosed that Citadel's MM desk accounted for the largest portion of their payment for order flow income in their rule 606 disclosures. But still a bad take because Citadel stands to make much more money on further trading, and Citadel's hedge fund likely has the capital to outlast retail.
https://cdn.robinhood.com/assets/robinhood/legal/RHS%20SEC%20Rule%20606a%20and%20607%20Disclosure%20Report%20Q3%202020.pdf https://cdn.robinhood.com/assets/robinhood/legal/RHS%20SEC%2...
- JumpCrisscross 6y agoLet me be clear: if I were sales at Robinhood, Citadel MM is a huge client. But Citadel MM is more likely to pull the plug on making markets in a name for risk reasons than to benefit a hedge fund position. To say nothing of the fact that Citadel got to bail out Melvin Capital, which is traditionally a profitable trade.
- tylerhou 6y agoI am agreeing with you that there is not much merit to a conspiracy that Citadel asked Robinhood to pull out. In particular, I believe Citadel would gain more from continued trading on Robinhood than they would lose from their hedge fund positions.