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That's fine if market makers stick to the rules. What do you make of some of what Citadel has done before? https://www.bloomberg.com/news/articles/2020-07-21/

That's fine if market makers stick to the rules. What do you make of some of what Citadel has done before? https://www.bloomberg.com/news/articles/2020-07-21/citadel-securities-fined-by-finra-for-trading-ahead-of-clients https://www.bloomberg.com/news/articles/2020-07-21/citadel-s... https://www.sec.gov/news/pressrelease/2017-11.html https://www.sec.gov/news/pressrelease/2017-11.html

tedunangst 6y ago
I think if you had started with "sometimes they don't offer as much price improvement as they promised" that'd have been more accurate.
- briefcomment 6y ago
  The upshot of this is that Citadel is selling retail GME at slightly elevated prices for profit. This will certainly contribute to higher GME prices. If Melvin is still short, Citadel is in a predicament. If they want the price as low as possible for Melvin’s sake, they need to actually provide the best price. I thought that was funny.
  - smabie 6y ago
    I guarantee that Citadel Securities isn't taking into considering what Citadel capital is doing. It's just not how firms like that operate. Every desk is trying to maximize pnl, end of story.
gruez 6y ago
There were no allegations that they provided a worse price than the NBBO (ie. the price you'd get if there wasn't PFOF), just that out of all the firms offering PFOF, robinhood didn't choose the best one for their customers.
- briefcomment 6y ago
  Did you read the SEC release? “But the SEC’s order finds that two algorithms used by Citadel Securities did not internalize retail orders at the best price observed nor sought to obtain the best price in the marketplace”
  - gruez 6y ago
    Presumably > [...] the best price observed [...] > [...] the best price in the marketplace [...] refers to the prices that they can get through all sources (ie. including PFOF firms aka market makers), not just NBBO.
    - briefcomment 6y ago
      Doesn’t this still mean Citadel Securities are not offering retail the best price, and are netting more as a result?
      - gruez 6y ago
        When did the goalposts get moved? Your original argument was citadel/robinhood was "front running trades". That's a more serious accusation than robinhood/citadel not getting the best price.

tedunangst 6y ago

I think if you had started with "sometimes they don't offer as much price improvement as they promised" that'd have been more accurate.

briefcomment 6y ago
The upshot of this is that Citadel is selling retail GME at slightly elevated prices for profit. This will certainly contribute to higher GME prices. If Melvin is still short, Citadel is in a predicament. If they want the price as low as possible for Melvin’s sake, they need to actually provide the best price. I thought that was funny.
- smabie 6y ago
  I guarantee that Citadel Securities isn't taking into considering what Citadel capital is doing. It's just not how firms like that operate. Every desk is trying to maximize pnl, end of story.

gruez 6y ago

There were no allegations that they provided a worse price than the NBBO (ie. the price you'd get if there wasn't PFOF), just that out of all the firms offering PFOF, robinhood didn't choose the best one for their customers.

briefcomment 6y ago
Did you read the SEC release? “But the SEC’s order finds that two algorithms used by Citadel Securities did not internalize retail orders at the best price observed nor sought to obtain the best price in the marketplace”
- gruez 6y ago
  Presumably > [...] the best price observed [...] > [...] the best price in the marketplace [...] refers to the prices that they can get through all sources (ie. including PFOF firms aka market makers), not just NBBO.
  - briefcomment 6y ago
    Doesn’t this still mean Citadel Securities are not offering retail the best price, and are netting more as a result?
    - gruez 6y ago
      When did the goalposts get moved? Your original argument was citadel/robinhood was "front running trades". That's a more serious accusation than robinhood/citadel not getting the best price.