Thanks to reporting from our friends at Flow Traders, Alphacution walks through a storyboard of ETP market attributes to arrive at an estimate for the structural (market making) revenue potential of the global and regional ETP markets...
A mini-case study on Virtu Financial, based on updated modeling through year-end 2020, cooked up special for fans of @dougielarge...
Following an impromptu gaggle of market structure nerds on the new social media app, Clubhouse, featuring Larry Tabb (Head of Market Structure Research, Bloomberg Intelligence) and Alex Gerko (CEO, XTX Markets), Alphacution offers a comparative ranking of 2020 retail order routing rates...
Alphacution adds to its library of evidence that retail brokerage platforms specifically decide how, when, and if to influence the trading behavior of their clients...
Inspired by Renaissance Technologies - as described in Greg Zuckerman's book, "The Man Who Solved The Market: How Jim Simons Launched The Quant Revolution - Alphacution leverages the concept of "factor dimensionality" to make a significant enhancement to its ecosystem map framework.
Alphacution provides numbers, pictures and rationale for "price improvement" - in the context of captive retail order flow - having an indelible function that is different than what you have been told by those who traffic in it...
Leveraging numbers and narrative, Alphacution builds a higher-dimension analysis of market structure mechanics on top of Bloomberg Opinion's Matt Levine's recent manifesto on payment for order flow (PFOF). Disclaimer: No unsolicited elbows were thrown during the creation of this Feed post...
“Money is only a tool. It will take you wherever you wish, but it will not replace you as the driver.”Ayn Rand UPDATE (2/17/2021): The following exhibits and content have been updated to reflect an additional $12 million in order routing revenue for Tastyworks earned in Q4 2020; the data for which not being available prior to the initial publication of this Feed post. This brings Alphacution's estimate for total payments for order flow in 2020 to $2.755 billion. Additional modeling for the 13th and smallest retail broker in our sample - Dough, LLC - reflecting $0.1 million in order routing revenue for 2020 is not included in the figures or analysis below. Presented, for now, without comment - except for: Alphacution identified and modeled 12 retailer brokers and 10 wholesale brokers for this analysisCitadel Securities paid more than $1.1 billion for retail order flow in 2020, representing 41.7% of total payments; largest by almost 2x of the second place wholesaler (the sum of SIG affiliates, G1 Execution Services and [...]
This is the fuel that ignites the chaos. Without it, the New Market Kamikazes run into the friction that keeps the rubber on the road...
"What's really happening here is that instead of people becoming engaged in finance when they're 40, 50, 60 or whatever, they're finally starting to learn that - hey - this is really cool. And so, we have an entire generation now which is not only going to support capitalism, it's going to accelerate the growth in free markets and [provide] massive amounts of liquidity so that everybody out there is going to benefit. This is the best thing to happen to the global economy in three or four decades. Getting millennials engaged in finance is transformational."Tom Sosnoff, co-founder, Tastytrade; on CNBC Squawk Box, January 29, 2021 in response to a question about the "democratization of finance" and the status of capitalism With all the craziness this week around GameStop, Robinhood and the whole STONKS meme, an event from last week is at risk of being swept under the rug. So, I wanted to add this one to the Feed as a marker before we lose the thread entirely. Here's the [...]
