NEW story about Penson/Apex. Worth a read for those that clear thru Penson.
- Thread starter jackpearson
- Start date
Quote from JuniorCTA:
If their in-house trading system generates a buy signal when their clients happen to be selling, they shouldn't take the signal??
No, your order should be sent to a competitve market, which internalization is not. You'll never know what the competitve price would have been, if you're operating in an environment of internalization. It changes the dynamics and incentives of the order book. Many exchanges provide price improvement of their own (and generally much larger, measured in 1c increments rather than 1/100 of a cent), not to mention the fact that internalization disincentivizes liquidity providers from tightening the spread.
"Price improvement" from your broker internalizing you is nothing but muppet bait.
That just does not sound right.
Where on earth are the regulators? That's a trainwreck waiting to happen.
It's a fine line between an in-house trading signal and internalizing orders.
A mighty mighty fine line.
def
Sponsor
Occam,
You need to do your homework. IB has stated numerous times that we don't internalize. IB places significant resources into obtaining best execution for clients. Sure the potential exists but we actually post price improvement stats measured in $ terms determined by an independent group. The 606 stats also show this. So before you post false innuendo, do some real research.
Save your reply for another thread though as this is about the WSJ article on Penson, APEX and the additional margin they are seeking from clients.
The interesting thing about this New firm APEX, is that it was not acquisition by Peak6. PNSN still owns 94% of APEX. Peak6 put in around $40M, Penson put in their client base and a lot of cash. Peak6 is now the managers of the new firm. The important aspect is that now the broker is not attached to the holding company, which has all the debt. Also, a lot of the debt and some contracts that were very expensive, we disposed of. This was the best case for all involved. The party that took the biggest hit form the change was Broadridge.
Really? Then why is it Trade King filing suit and not Broadridge I wonder?
Broadridge wrote off over $20M in losses. TradeKing had too little money up as a correspondant before. My guess is the Peak6 does not want to subsidize their competition to OptionHouse. This business requires a lot of capital. If they can find a relationship at another Prime Broker, they will need at least $1M to do business anywhere else. The relationship will be hard to copy. Very few Prime Brokers want lots of small retail accounts. The cost per client is too high at the retail level vs revenues.
Hey def, please check your IM when you can.
Don