Comment by helsinkiandrew | Hacker News Reader

Comment by helsinkiandrew | Hacker News Reader

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Can you provide evidence that PFOF is harming retail traders? studies keep showing the contrary.

https://www.barrons.com/articles/payment-for-order-flow-sec-...

> In an Aug. 13 working paper, five finance professors analyzed 85,000 stock trades they made through five leading retail brokers. They did get significantly different pricing through different brokers for identical orders to buy or sell at the current market price.

> But their best pricing came from a broker that takes payment for order flow, namely TD Ameritrade, now a unit of Charles Schwab. Fidelity, which takes no order payments, got worse prices on the professors’ trades than did TD Ameritrade. And its prices were no better than those from the E*Trade unit of Morgan Stanley, which does take payments. Robinhood, which used revenue from order-flow payments to subsidize the industry’s first commission-free trading, delivered middle-of-the-pack pricing.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4189239

That's not really surprising though.

First Citadel destroys lit markets by having the majority of US orders routed to them for dark execution using things like Citadel Connect (less regulated and worse than a dark pool, which they also love by the way) and then they scream "look we give you better prices than you can get at the lit markets that we just destroyed (after literally front-running you)". Please love us, we're doing god's work!

Sidenote: like Madoff there's a massive conflict of interest where Ken Griffin owns both a (huge) market maker business as well as a hedge fund (that had 64 billion in securities sold, not yet purchased "at fair value" on its balance sheet against some 4 billion in assets).

PS: I'm just going to call it. That CEO Zhang doesn't exist and is generated by AI, just to distract from all the massive Citadel crime. Maybe tin foil, maybe not.

PS PS: Citadel need to dissapear and Griffin needs to be in jail. He is Madoff 2.0 supercharged.

The people who think retail is being harmed could not have traded 15 years ago.

Anyone who thinks things were better for retail back in the day with at least $5+ per side and some guy in the middle in NY or Chicago making a market on a floor is a moron. There is just no other way to put it.

Markets in 2023 is an absolute dream for retail.

True : i remember riding my bike as a kid to my local bank to pay a broker to put in an order to buy a couple thousand dollars (saved from doing landscaping in our neighborhood like kids did in the 80s) of useless IBM. Totally flipped a coin between IBM and Microsoft.

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