IB Quits options game!
- Thread starter SoesWasBetter
- Start date
That's how they started out... so there's probably some sentimental value for Petterfy.
But as I've said, and @Zzzz1 says correctly, they've lost the game years ago to companies like Citadel and Virtu. Maybe not as much on the technology level, but IMO more because they've never really dived into the HFT and hedgefund style trading. There's not much money to be made anymore if you keep just trying to cut it with on-screen (mainly retail) quotes and don't take on more risk in positions... gamma/vega etc. Smart plays, like HF does.
And if you've never done something like that, you will not have the skill sets to compete and with costs continuing to blow out because of tech advances, you will be left behind.
Firms like Citadel are more like a hedgefund that does MM as well... that would still work, since they are better at adapting.
Anyway, they're good at being a retail brokerage, so cut the cord and done... I'm surprised they didn't spin it off though. Keep some capital in there and let them work things out on their own. They might be able to evolve and keep doing their thing separately. They'll never be as big as Citadel though...
I'm the last person in the world to tout a conspiracy theory! I've explained over and over how it's functionally equivalent to be paid by another company for order flow and to direct that order flow to an owned subsidiary who profits from it. It's also functionally equivalent to "internalize" when wholly owned subsidiary takes the other side of your order as when the broker itself takes the other side of an order. A wholly owned subsidiary is a legal construct that has no bearing on the inherent conflict of interest that occurs in both these cases. That's not a conspiracy theory, that's just a basic understanding of business! Lot's of companies internalize and accept payment for order flow, it's not illegal as long as the company discloses that their interests are in conflict with your customers. In IBs case, their interests are in exactly the same conflict with their customers when they internalize to TimberHill or direct order flow to TimberHill. To claim otherwise is either ignorant or dishonest.
One debases a "conspiracy theory" by pointing out what wild and crazy speculations are contained therein. Would you care to do so in this case, or are you just going to throw the term out there? Is my logic above flawed? Would also be interested to hear your definition of "years", by the way, it appears to be anything over 18 months?
Everyone acknowledges that a GAIN owned MM operates on Nadex. I've personally acknowledged it over and over. If I ever claim that isn't true, which eastern warrier did in the case of IB a few posts above, then feel free to correct me. Nadex never claims to operate free of any conflict of interest, eastern warrior incorrectly claims that IB doesn't have any conflicts. By the way, of the 30 or so problems I have with IB, the fact that they internalize and direct order flow to TimberHill isn't really one of them. The fact that they are dishonest about it is, especially in concert with the blatantly incorrect information their "customer service" used to spew to me, which indicates an entire corporate culture of dishonesty from the CEO on down.
Perhaps using the choice of words "conspiracy theory" was not correct but nonetheless, you refuse to listen to someone who build a reputation for being straight with the market and exchanges over a period of 30 years. Here's the quote from the release - emphasis mine. I tend to believe it since it the same statement has been made in the same shape or form ever since I started following the firm: "Today retail order-flow is purchased by large order internalizers and joining them would represent a conflict we do not wish to have. On the other hand, providing liquidity to sophisticated, professional synthesizers of short-term fundamental, technical and big data is not a profitable activity."
In any event, it's a moot point now as your so called conflict of interest will be no more.
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the remark is not suitable for a capitalist system. the government should not be allowed to deny a merger because of some preconceived notion of a government bureaucrat determing what constitutes a public benefit. you also mentioned there are too many exchanges. one can't have it both ways.
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any book would be outdated before it is published. that is the reason newsletters catering to specific industries continue to exist,
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