4 ms·

There aren’t offering anything new and even frontrun their customers. And with the GameStop fiasco, I think a lot of people realizes it was a bad business mode

There aren’t offering anything new and even frontrun their customers. And with the GameStop fiasco, I think a lot of people realizes it was a bad business model. I don’t think they will be able to recover. It will drop even more if a recession ever hits.

qeternity 4y ago
> and even frontrun their customers. Oh ffs no they don’t.
- metadat 4y ago
  I thought RobinHood helped Citadel front run the orders? See https://www.washingtonpost.com/business/2021/01/29/robinhood-citadel-gamestop-reddit/ https://www.washingtonpost.com/business/2021/01/29/robinhood...
  - deleted 4y ago
    [deleted]
  - ac29 4y ago
    Payment for order flow is not front running (which is illegal).
    - mushbino 4y ago
      What is the order flow used for?
      - colinmhayes 4y ago
        Citadel believes that they are less likely to lose money when they fill orders from retail investors. They're just paying for access to rubes, basically a finders fee.
lupire 4y ago
The front running is instead of a transaction fee. Customers have to pay for the service somehow.
nly 4y ago
They don't front-run orders. They still give best execution but they receive a small fee from market makers for sending orders their way. If both market maker A and market maker B offer the same price but B is going to pay them slightly more than A for your order, then they can legally route your order to B. Many brokers do this now. Front running is different entirely. For example, if you were about to buy a load of stock, front running would be Robinhood buying in before you, waiting for your order to clear the price level, and then selling a few ticks higher.
- NovemberWhiskey 4y ago
  >They don't front-run orders. They still give best execution but they receive a small fee from market makers for sending orders their way. I really have most serious doubts about the idea that you can simultaneously get paid for order flow and deliver on your best execution obligations - the payment for order flow literally comes out of missed price improvement opportunities for the customer. FINRA seems to feel the same way and fired a warning shot over the bows last year: https://www.finra.org/rules-guidance/notices/21-23 https://www.finra.org/rules-guidance/notices/21-23

qeternity 4y ago

> and even frontrun their customers. Oh ffs no they don’t.

metadat 4y ago
I thought RobinHood helped Citadel front run the orders? See https://www.washingtonpost.com/business/2021/01/29/robinhood-citadel-gamestop-reddit/ https://www.washingtonpost.com/business/2021/01/29/robinhood...
- deleted 4y ago
  [deleted]
- ac29 4y ago
  Payment for order flow is not front running (which is illegal).
  - mushbino 4y ago
    What is the order flow used for?
    - colinmhayes 4y ago
      Citadel believes that they are less likely to lose money when they fill orders from retail investors. They're just paying for access to rubes, basically a finders fee.

lupire 4y ago

The front running is instead of a transaction fee. Customers have to pay for the service somehow.

nly 4y ago

They don't front-run orders. They still give best execution but they receive a small fee from market makers for sending orders their way. If both market maker A and market maker B offer the same price but B is going to pay them slightly more than A for your order, then they can legally route your order to B. Many brokers do this now. Front running is different entirely. For example, if you were about to buy a load of stock, front running would be Robinhood buying in before you, waiting for your order to clear the price level, and then selling a few ticks higher.

NovemberWhiskey 4y ago
>They don't front-run orders. They still give best execution but they receive a small fee from market makers for sending orders their way. I really have most serious doubts about the idea that you can simultaneously get paid for order flow and deliver on your best execution obligations - the payment for order flow literally comes out of missed price improvement opportunities for the customer. FINRA seems to feel the same way and fired a warning shot over the bows last year: https://www.finra.org/rules-guidance/notices/21-23 https://www.finra.org/rules-guidance/notices/21-23