Robinhood Gets Almost Half Its Revenue from Bargain with High-Speed Traders
1–10 of 96 posts
Re: Robinhood Gets Almost Half Its Revenue from Bargain with High-Speed Traders
#2Dumb money for sale.
Re: Robinhood Gets Almost Half Its Revenue from Bargain with High-Speed Traders
#3Dumb money for sale.
This is true, but it uses an unfortunate industry term that is more pejorative sounding than it actually is.
When people in the industry talk about 'dumb money' they aren't talking about how informed or intelligent the order flow is. They are talking about how likely the order relates to market structure.
An individual investor who has looked at their portfolio and decided that the best move for their investment horizon is to move a big component out of equities and into bonds is still 'dumb money'. Even though that might be the most intelligent option.
A bot that has a terribly performing algorithm that takes market structure into account is not dumb money though.
Re: Robinhood Gets Almost Half Its Revenue from Bargain with High-Speed Traders
#4Dumb money for sale.
This is true, but it uses an unfortunate industry term that is more pejorative sounding than it actually is. When people in the industry talk about 'dumb money' they aren't talking about how informed or intelligent the order flow is. They are talking about how likely the order relates to market structure. An individual investor who has looked at their portfolio and decided that the best move for their investment hori…
> They are talking about how likely the order relates to market structure.
What do you mean by "market structure?"
Re: Robinhood Gets Almost Half Its Revenue from Bargain with High-Speed Traders
#5oh man, this is priceless.....pretty much made my day.
Re: Robinhood Gets Almost Half Its Revenue from Bargain with High-Speed Traders
#6As someone that paid $25,000 in options commissions in 2015 even after negotiating down to 50 cents/contract and no ticket charge, free options trading in exchange for my trade data is a fair trade
Now if only they'd give the option of Portfolio Margining instead of just Reg-T margining, I'd let the HFT's pair-program with me in person.
Re: Robinhood Gets Almost Half Its Revenue from Bargain with High-Speed Traders
#7Dumb money for sale.
This is true, but it uses an unfortunate industry term that is more pejorative sounding than it actually is. When people in the industry talk about 'dumb money' they aren't talking about how informed or intelligent the order flow is. They are talking about how likely the order relates to market structure. An individual investor who has looked at their portfolio and decided that the best move for their investment hori…
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Re: Robinhood Gets Almost Half Its Revenue from Bargain with High-Speed Traders
#8Earlier quoted context omitted.
This is true, but it uses an unfortunate industry term that is more pejorative sounding than it actually is. When people in the industry talk about 'dumb money' they aren't talking about how informed or intelligent the order flow is. They are talking about how likely the order relates to market structure. An individual investor who has looked at their portfolio and decided that the best move for their investment hori…
> They are talking about how likely the order relates to market structure. What do you mean by "market structure?"
When people talk about 'the stock market' or 'the stock price' they are using a very coarse abstraction.
In reality for most trade-able instruments there are a variety of exchanges all operating at once. Further in each exchange there isn't a single price. There is a collection of buy and sell orders that combined together form the 'book'. For instance if you had 10 buy orders at $1 and 2000 sell orders at $1.10 what is the 'price' of that thing? The structure of the book and how all the exchanges relate (and Reg NMS in the US equities space) are all the 'market structure'.
Re: Robinhood Gets Almost Half Its Revenue from Bargain with High-Speed Traders
#9As someone that paid $25,000 in options commissions in 2015 even after negotiating down to 50 cents/contract and no ticket charge, free options trading in exchange for my trade data is a fair trade Now if only they'd give the option of Portfolio Margining instead of just Reg-T margining, I'd let the HFT's pair-program with me in person.
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Re: Robinhood Gets Almost Half Its Revenue from Bargain with High-Speed Traders
#10I was under the impression that retail order flow is mostly useless to HFT and they make money on large institutional moves - retail investors just don't affect the market enough for it to matter.
Is that a wrong assumption? If not, seems like maybe RH is just taking advantage of the rebate for not much benefit to Citadel?