AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |
Back to Blog
The segmentation of retail order flow away from lit markets means less competition and materially wider spreads as exchange toxicity increases. PFOF creates an intractable conflict-of-interest for brokers whose financial incentives are placed at odds with their duty of best execution. These companies face little competition and amass greater market power, as two of these firms are responsible for a huge share of trading, both on-exchange and off. Gaps created by the lack of meaningful competition, transparency and simplicity have resulted in billions of dollars in annual Payment for Order Flow (PFOF) made from high-speed trading firms to brokers, while these firms generate multiples of this in revenue. But as more people earnestly participate in the markets than ever before, the opacity and complexity of markets has left them concerned that: markets are not adequately providing price discovery that too much power is concentrated in too few firms and that they cannot trust such a complex system that lacks appropriate transparency. In the last 18 months alone, 25 million new investors joined the stock market, and at their peak, retail investors made up more than 25% of the U.S.
0 Comments
Read More
Leave a Reply. |