Zero-commission stock brokerages

[blakpacman]

http://finance.yahoo.com/news/as-up...the-big-brokers-shun-price-war-194021291.html

 

[ScalperJoe]

Good article. It seems the firm, Robinhood Financial, is going to target the youth who want to buy trendy stocks via their iPhones. I like the following sentence in the article:

"But, of course, casually picking individual stocks based on personal affinity is a pretty good recipe for getting eaten up by the market."

And that's exactly what may happen! But at least they'll get free commissions.

 

[francis1]

But it's not free: order flow is most likely be sold to the highest bidder which is unlikely to be the best price.

 

[Rum Runner]

But it's not free: order flow is most likely be sold to the highest bidder which is unlikely to be the best price.

And how is that different from the other brokers out there? They're all doing the same thing.

 

[francis1]

Probably but my point is zero commissions is a big incentive to push that order flow model to the limit.

 

[def]

And how is that different from the other brokers out there? They're all doing the same thing.

All are NOT doing the same.

 

[Rum Runner]

All are NOT doing the same.

Okay, I was generalizing. Some just use their own ATS or route orders to where they'll get a nice rebate and not the best execution.

 

[def]

Okay, I was generalizing. Some just use their own ATS or route orders to where they'll get a nice rebate and not the best execution.

OR some may use their designed SMART routing to seek out the best execution for their clients (and actually pass rebates rec'd back to clients).

IB SmartRouting Advantage