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I run a ~15 person prop group in Denver and we have access to the fastest connections on the routes we care about. Paying a retail broker for flow is distastef
by HockeyPlayer 12y ago
I run a ~15 person prop group in Denver and we have access to the fastest connections on the routes we care about.
Paying a retail broker for flow is distasteful to me, I'd rather compete in the marketplace for edge.
- cynicalkane 12y agoWhy is that distateful? My impression is selling flow is the only way for retail brokers to keep competitive prices while complying with SEC rules. Instead of executing orders themselves according to the rules, they sell the order then price it to the customer as if it had been executed by the rules. I've never worked in equities so correct me if I'm wrong.
- HockeyPlayer 12y agoMy concern is that the investor doesn't understand what is happening. Someone goes out to hit a bid, but actually a prop group has paid to see their intention before it goes to the market, and can choose to participate or not. But I'm a futures guy, so my understanding of payment for flow is minimal.