the buy-side model, could it happen?

J

Javier

Lets assume one retail buys at 2018.00, where Hft is serving liquidity. After that buy, due to payment for order flow a big firm knows the retail just bought (i.eg. citadel) and comes to buy lower 2017.75, ....2017.50,.. 2017.25... consuming all that liquidity at that levels and droping down the price accumulating hoping to sell in an upper average later. In this case, the first buyer is in a big loss.

Is that possible?
 
No matter, change buy for sell stop lower. Filling all the buys and droping the price forcing the first one into a big loss. Is that possible?
 
what does that have to do with payment for orderflow? everyone in the world can see that a buy was bought on the offer through time and sales
 
2rosy said:
what does that have to do with payment for orderflow? everyone in the world can see that a buy was bought on the offer through time and sales
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That depends on the instrument -- for S&P futures, what you say is correct, as all contracts of particular type trade in a single venue.

For US equities, on the other hand, it is not generally possible to know whether a trade was at the bid or offer, particularly in a "payment-for-order-flow" situation where wholesaling or internalization was involved, in which case the trade may even be reported much later, via a TRF, than the time at which it occurred. The wholesaler also has all of this information earlier than the rest of the market.
 
Javier said:
Lets assume one retail buys at 2018.00, where Hft is serving liquidity. After that buy, due to payment for order flow a big firm knows the retail just bought (i.eg. citadel) and comes to buy lower 2017.75, ....2017.50,.. 2017.25... consuming all that liquidity at that levels and droping down the price accumulating hoping to sell in an upper average later. In this case, the first buyer is in a big loss.

Is that possible?
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Big Firms are not out to spend millions to just to hunt a single retail traders stops... get over yourself you are not that important with your 1 lot position


If you can't handle a move that small you are betting way to big for your account size
 
Ok thanks for advices. Well I was not speaking only about 1 person. I was looking how algos worked with the mass, just wondering about if that was real or not.
Yes my account I think was too small . I realized that when I made money, commisions beat me up easily so I stop it and just trade for others .
Tx for clarify.
 
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