I mean, it's probably entirely automated; you're lumped in with all the other lots on the same side, and compared against all the other lots they're frontrunning opposite, and using that information to gain a penny somewhere.
What is the catch with Robinhood?
- Thread starter RGLD
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I mean, it's probably entirely automated; you're lumped in with all the other lots on the same side, and compared against all the other lots they're frontrunning opposite, and using that information to gain a penny somewhere.
Can using only limit orders help retail clients of Robin Hood avoid lousy fills?
I truly don’t know. I’m all about futures and OTC Swaps. My stock trading adventures have been mostly 401K.
I played around with some equity pairs in the mid-2000’s using Lime.
From what I now know, I wouldn’t day trade stocks with a discount broker, that’s for sure.
I played around with some equity pairs in the mid-2000’s using Lime.
From what I now know, I wouldn’t day trade stocks with a discount broker, that’s for sure.
No, but when you're trading a hot ticker and your order is bought by an HFT in a block you'll be front run with everyone else. It doesn't have to be a whale coming in with block of 500,000 shares. It can be a case where everyone in the market is loading up/dumping something.
yeah. And they pay for access to other things like research, leverage, access to companies cfos, access to otc products, capital commitment, etc.
Plus no market maker wants to pay for citadels order flow. Their goal is to avoid citadels orderflow.
Overall do you think the potential cost of that (remember there is also reg nms) is less than or greater than my hard costs on commissions?
I think that you should be able to figure that out for yourself. Depends upon how frequently you trade and how long you hang onto positions.
Knowing what I know now - there’s no way that I personally would day trade stocks with a discount broker that I know sells the order flow. If I were frequently trading stocks I would much rather pay commissions if I knew that the trade order was being routed in order to get the most advantageous customer fill.
Knowing what I know now - there’s no way that I personally would day trade stocks with a discount broker that I know sells the order flow. If I were frequently trading stocks I would much rather pay commissions if I knew that the trade order was being routed in order to get the most advantageous customer fill.
With commission free brokers you have a market maker trading against your order - they hold limit orders as their hedge to fill when price rolls over. You are subject to adverse selection, slower fills, & more partial fills.
This may feel good when you don't pay for commissions, however : on a 1,000 share order you save $5 or whatever on commissions but eat on avg of about $10-$25 from the inferior fill.
When you trade directly on an ECN & know what you are doing - you are more likely to get a positive mark-out, meaning the trade is profitable right out of the gate as oppsed to going against you right away, buyers remorse.
DMA should save you thousands over the year in better fills if your an active taker. CF may be fine for casual trading.
IB' CEO in an earnings interview was asked how many were switching to commission free, he responded that few had since most of their existing customer base is more sophisticated.
The notion that CF must be o.k. since nobody can beet the NBBO & a limit will get you as good of a fill as any is a myth. All exchanges are outside of the NBBO a portion of the time - especially the inverse maker taker venues.
This may feel good when you don't pay for commissions, however : on a 1,000 share order you save $5 or whatever on commissions but eat on avg of about $10-$25 from the inferior fill.
When you trade directly on an ECN & know what you are doing - you are more likely to get a positive mark-out, meaning the trade is profitable right out of the gate as oppsed to going against you right away, buyers remorse.
DMA should save you thousands over the year in better fills if your an active taker. CF may be fine for casual trading.
IB' CEO in an earnings interview was asked how many were switching to commission free, he responded that few had since most of their existing customer base is more sophisticated.
The notion that CF must be o.k. since nobody can beet the NBBO & a limit will get you as good of a fill as any is a myth. All exchanges are outside of the NBBO a portion of the time - especially the inverse maker taker venues.
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Mic drop.
This is where it’s too bad that Knight isn’t around, because sophisticated stock investors were their bread and butter.
Where do the automated trading systems (that aren’t paying for order flow) go? IB Pro?
This is where it’s too bad that Knight isn’t around, because sophisticated stock investors were their bread and butter.
Where do the automated trading systems (that aren’t paying for order flow) go? IB Pro?
It was a rhetorical question to gaussian.
I would rather save the hard commission than receive the soft benefit of potentially better fills. Order fills still have to be competitive.
The world has probably changed a lot, but when i was a market maker PFOF gave you first look at customer flow, but you had to be competitive in price to win it. If you were competitive, you got the order.
I'm not worried about front running as i don't trade that big. I am annoyed that posted liquidity has dropped but that's more about high frequency trading rather than PFOF.