Fraud: Broker kind of "frontruns" client order. Reporting to SEC?

traider said:
What comms are you paying for that option trade? Is it very cheap due to PFOF? It sounds like the order went to a market maker first before they decide where to send it. They could claim that they want to avoid locking the markets , tons of reasons they can use because each option exchange can have their own shitty rules that benefit the big players. The entire market is rigged <snip>
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The broker says "$0 commission" and at the same time a "fee of $0.65 per contract" :)
Ie. effectively $0.65 per contract.

Yeah, afterwards, after they have been caught-in-the-act, they can give any of these preformulated reasons... Never a "fault" of themselves, always a fault of others... The usual default excuse in such circles... :)

BTW, an interesting read that explains PFOF (Payment For Order Flow) :
https://public.com/learn/payment-for-order-flow-pfof-explained-and-why-it-matters

But of course usually a more "authentic" info can be found at wikipedia:
https://en.wikipedia.org/wiki/Payment_for_order_flow

So, then it's an attempted fraud committed by the market maker.
But then the control instance of the broker has failed as well. The question is: Why?
Why does the broker not verify that the order landed correctly in the market?
Testing this programmatically is IMO very well possible!...
 
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thecoder said:
The broker says "$0 commission" and at the same time a "fee of $0.65 per contract" :)
Ie. effectively $0.65 per contract.

Yeah, afterwards, after they have been caught-in-the-act, they can give any of these preformulated reasons... Never a "fault" of themselves, always a fault of others... The usual default excuse in such circles... :)

BTW, an interesting read that explains PFOF (Payment For Order Flow) :
https://public.com/learn/payment-for-order-flow-pfof-explained-and-why-it-matters

But of course usually a more "authentic" info can be found at wikipedia:
https://en.wikipedia.org/wiki/Payment_for_order_flow

So, then it's an attempted fraud committed by the market maker.
But then the control instance of the broker has failed as well. The question is: Why?
Why does the broker not verify that the order landed correctly in the market?
Testing this programmatically is IMO very well possible!...
More...

This will not be a surprise, it's not the first time nor the last time
SEC Charges Direct Edge Exchanges With Failing to Properly Describe Order Types
https://www.sec.gov/news/pressrelease/2015-2.html

All hope is lost till the fair put arrives.
 
thecoder said:
The broker says "$0 commission" and at the same time a "fee of $0.65 per contract" :)
Ie. effectively $0.65 per contract.

Yeah, afterwards, after they have been caught-in-the-act, they can give any of these preformulated reasons... Never a "fault" of themselves, always a fault of others... The usual default excuse in such circles... :)

BTW, an interesting read that explains PFOF (Payment For Order Flow) :
https://public.com/learn/payment-for-order-flow-pfof-explained-and-why-it-matters

But of course usually a more "authentic" info can be found at wikipedia:
https://en.wikipedia.org/wiki/Payment_for_order_flow

So, then it's an attempted fraud committed by the market maker.
But then the control instance of the broker has failed as well. The question is: Why?
Why does the broker not verify that the order landed correctly in the market?
Testing this programmatically is IMO very well possible!...
More...
I can't stop facepalming...really. The order is the brokers (not yours). The market maker has no influence on the order nor can he change the price.
The broker is bound by best execution rules. If you post a volatility order, price will change with spot and vol.

Attempted fraud of the market maker...made me chuckle.
Not knowing the difference between commission and fees (exchange fees, clearing fees, et al) made me rofl

All the tinfoil hats in this thread should really update themselves regarding current market structure. OP should read into his brokers 606 report.
 
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Best execution ... is there such a thing in modern markets?

Rep. Brad Sherman accused Citadel CEO Ken Griffin of "wasting his time" during a Congressional hearing about January's GameStop stock trading frenzy on Thursday.

Sherman, a Democrat from California, became heated and interrupted Griffin multiple times as he questioned the executive if Citadel gives better prices to certain brokerages, like Robinhood and Fidelity, to execute their trades.

Griffin began answering the question by explaining the quality of Citadel's execution varies by how the order comes in and the size of the order received. Sherman said Griffin did not answer his question directly, and instead avoided answering by "making up other questions."

"You are doing a great job of wasting my time," Sherman said. "If you're going to filibuster you should run for the Senate."
 
MrMuppet said:
I can't stop facepalming...really. The order is the brokers (not yours). The market maker has no influence on the order nor can he change the price.
The broker is bound by best execution rules. If you post a volatility order, price will change with spot and vol.

Attempted fraud of the market maker...made me chuckle.
Not knowing the difference between commission and fees (exchange fees, clearing fees, et al) made me rofl

All the tinfoil hats in this thread should really update themselves regarding current market structure. OP should read into his brokers 606 report.
More...
MrMuppet, what is your explanation of this scenario, ie. what do you think has happened and whom to blame for the error?
Why did my Bid not land in the orderbook, and instead a lower Bid of someone else landed there? For more than a week long, then suddenly it got fixed after I complained to the broker.
What is your explanation for this all?
 
ajacobson said:
16 exchanges tied together by linkage and one source of quotes - OPRA - changing the market on one exchange may or may not change the NBBO if it is multiply listed. The order would also need to be labeled "Firm" in the OPRA character field. If a better market existed away it should ship, unless labeled as not to. So kinda tough to accomplish this - would a broker really risk thousands in fines for $.05 and the likelihood of getting booted of OPRA and other sanctions.
Plus if this bullshit was true - wouldn't you want a higher bid - not a higher offer, but a higher bid as outlined.
You can send a tip to the SEC tipline if you thought this was systemic. Great Whistleblower rewards if fines are levied.
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At last, someone who knows how the US option market works.
 
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