5 ms·

How exactly are sell-side trading desks stealing from the poor?

finikytou 5y ago
I meant Madoff would be free to do whatever he wants. But ill bite. Just look at all the robinhood millenials getting robbed by Citadel that literally has insider knowledge of all the robinhood transactions.
- bobthechef 5y ago
  The more fundamental problem is that interest is usury and usury is theft. And naturally, the entire modern banking system runs on interest (which is probably the least egregious of all the wacky financial instruments out there). You'll hear nonsense about the opportunity cost and risk, none of which have any relevance to or rebut the notion that charging interest (as opposed to just fixed administrative fees) is theft. Time isn't a commodity, so why am I paying you more the longer it takes me to pay back my loan? Is your gold and silver ewes and rams? Shylock cannot tell. He makes it breed as fast.
  - bidirectional 5y ago
    Of course time is a commodity. A (potentially false promise of a) dollar in one year is less useful than a dollar tomorrow which is less useful than a dollar right now. If you do believe interest is theft and time has no value, you can act as a kind of Robin Hood by putting all of your money into bonds from Goldman Sachs, the US government or whoever you deem the worst perpetrator of this theft. You'll literally be stealing from them!
- bidirectional 5y ago
  That's not what I'm asking about. They specifically said trading desks at banks, Citadel is a market maker. But what's really you're just parroting baseless conspiracy -- Citadel is a legitimate business which provides a great service to Robin Hood users. Payment for order flow is very good for the retail investor, reducing commissions and improving prices, the recent episode of Bloomberg's Odd Lots podcast with Doug Cifu went explained exactly how this works, it's a classic example of incentives aligning. Also by design no market maker gets access to all Robinhood transactions.
  - finikytou 5y ago
    sure. they dont get access to all robinhood transactions. their trading algorithms do the work. if you know a few ms in advance the trades you can literaly make money out of it. and this should be clearly advertised when getting into robinhood. Your argument that it is to help retail traders to enter for cheap into trading is fallacious. It is exactly like saying getting into real estate nowadays is a no brainer due to low interest loans. even tho the loan means borrowing money for 30years and living like a slave to pay a rent that the generation before you got in 10years. In the same ways FB makes money out of people Citadel and Robinhood does it 0 conspiracy there
    - bidirectional 5y ago
      It's nothing to do with knowing the trades 'in advance', they're the ones doing the trades! Market makers like Citadel are regulated to improve the prices offered in the market place. A stock may trade for $50 on the exchange, but Citadel can sell it for $49.50, they must improve prices and they do. Part of the reason they can do this is that Robin Hood orders are 'safe'. If a huge hedge fund comes to Citadel and wants to trade a million shares in TSLA, they likely know something Citadel doesn't and will rip their face off. That's why Robin Hood orders are valuable, luckily, the incentives of the retail investor (buying a stock as cheap as possible) and the market maker (selling to someone who isn't about to pummel them) line up. If you think Citadel and its ilk are bad, you should see the guys they replaced! Market making is as old as the market itself, the modern advancements allow commission-free trading, massive liquidity and tiny spreads, before you'd be paying commission and buying a stock for dollars more than you could sell it for. They're good for the market and it's a shame this crazy conspiratorial thinking (which is never backed up by any real understanding) has taken hold of so many people.
    - finikytou 5y ago
      You re right. they do the trades for robinhood users. What do you think they do between the time they receive the order and execute it? don't forget that the default trade on robinhood has no limit to it. you buying market value. now try doing that on millions of users just like madoff did playing with the cents.

I meant Madoff would be free to do whatever he wants. But ill bite. Just look at all the robinhood millenials getting robbed by Citadel that literally has insider knowledge of all the robinhood transactions.

bobthechef 5y ago
The more fundamental problem is that interest is usury and usury is theft. And naturally, the entire modern banking system runs on interest (which is probably the least egregious of all the wacky financial instruments out there). You'll hear nonsense about the opportunity cost and risk, none of which have any relevance to or rebut the notion that charging interest (as opposed to just fixed administrative fees) is theft. Time isn't a commodity, so why am I paying you more the longer it takes me to pay back my loan? Is your gold and silver ewes and rams? Shylock cannot tell. He makes it breed as fast.
- bidirectional 5y ago
  Of course time is a commodity. A (potentially false promise of a) dollar in one year is less useful than a dollar tomorrow which is less useful than a dollar right now. If you do believe interest is theft and time has no value, you can act as a kind of Robin Hood by putting all of your money into bonds from Goldman Sachs, the US government or whoever you deem the worst perpetrator of this theft. You'll literally be stealing from them!
bidirectional 5y ago
That's not what I'm asking about. They specifically said trading desks at banks, Citadel is a market maker. But what's really you're just parroting baseless conspiracy -- Citadel is a legitimate business which provides a great service to Robin Hood users. Payment for order flow is very good for the retail investor, reducing commissions and improving prices, the recent episode of Bloomberg's Odd Lots podcast with Doug Cifu went explained exactly how this works, it's a classic example of incentives aligning. Also by design no market maker gets access to all Robinhood transactions.
- finikytou 5y ago
  sure. they dont get access to all robinhood transactions. their trading algorithms do the work. if you know a few ms in advance the trades you can literaly make money out of it. and this should be clearly advertised when getting into robinhood. Your argument that it is to help retail traders to enter for cheap into trading is fallacious. It is exactly like saying getting into real estate nowadays is a no brainer due to low interest loans. even tho the loan means borrowing money for 30years and living like a slave to pay a rent that the generation before you got in 10years. In the same ways FB makes money out of people Citadel and Robinhood does it 0 conspiracy there
  - bidirectional 5y ago
    It's nothing to do with knowing the trades 'in advance', they're the ones doing the trades! Market makers like Citadel are regulated to improve the prices offered in the market place. A stock may trade for $50 on the exchange, but Citadel can sell it for $49.50, they must improve prices and they do. Part of the reason they can do this is that Robin Hood orders are 'safe'. If a huge hedge fund comes to Citadel and wants to trade a million shares in TSLA, they likely know something Citadel doesn't and will rip their face off. That's why Robin Hood orders are valuable, luckily, the incentives of the retail investor (buying a stock as cheap as possible) and the market maker (selling to someone who isn't about to pummel them) line up. If you think Citadel and its ilk are bad, you should see the guys they replaced! Market making is as old as the market itself, the modern advancements allow commission-free trading, massive liquidity and tiny spreads, before you'd be paying commission and buying a stock for dollars more than you could sell it for. They're good for the market and it's a shame this crazy conspiratorial thinking (which is never backed up by any real understanding) has taken hold of so many people.
  - finikytou 5y ago
    You re right. they do the trades for robinhood users. What do you think they do between the time they receive the order and execute it? don't forget that the default trade on robinhood has no limit to it. you buying market value. now try doing that on millions of users just like madoff did playing with the cents.