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Alphacution Adopts Subscription Model

“You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something – your gut, destiny, life, karma, whatever. Because believing that the dots will connect down the road will give you the confidence to follow your heart even when it leads you off the well worn path; and that will make all the difference.”Steve Jobs [...]

By |October 16th, 2020|Open|

HAP Trading’s Book: Hiding in Plain Sight

"It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change, that lives within the means available and works cooperatively against common threats."Charles Darwin Consider that the capital markets are like an evolving ecosystem wherein the players - from market makers to hedge funds to the largest asset managers, among others - are like various species of creature. Depending on environment conditions [...]

By |November 24th, 2020|For Subscribers|

#TBM – Yellen and Me: The Catalyst Behind the Rate Decision

In light of current events, we bring this one back from the Alphacution archives. Welcome to - uh - Throwback Monday? < This is a test. This station is conducting a test of the Emergency Broadcast System. This is only a test.> I had been in this room before. It was the early post-Dodd Frank days. Maybe February 2012. I had authored a study on the impacts of new regulations on collateral and initial margin requirements for OTC [...]

By |November 23rd, 2020|Open|

The Plot Thickens: IEX Intervenes in Citadel Securities v. SEC

"It has long been an axiom of mine that the little things are infinitely the most important."Sherlock Holmes For those of you who prefer the Cumberbatch version of Holmes - or anything else you might want to get off your chest - feel free to take your leave to intervene at feedback@alphacution.com... For the rest of you, this is a quickie to highlight the fact that (on Friday the 13th) IEX has taken its own leave to intervene [...]

By |November 16th, 2020|For Subscribers|

Alphacution Press: Crain’s Chicago Business on the Surge in Option Trading

"Stock options trading has skyrocketed 31 percent this year to an annual record, lifting the fortunes of the firms in Chicago that specialize in them."Crain's Chicago Business reporter, Lynne Marek Alphacution contributes analysis to the Crain's Chicago Business story on how local firms have pocketed profits and expanded operations in a record boom after several tough years in "It's a great time to be an options trader" with mentions of Chicago-based firms, all of which Alphacution has touched [...]

By |November 14th, 2020|Press|

Pennies and Locomotives: Hypothesis for Virtu’s Next Acquisition

"Words ought to be a little wild, for they are the assault of thoughts on the unthinking."John Maynard Keynes Back in the day, we called it picking up pennies in front of locomotives. Today, that locomotive is one nasty beast... Virtu is having a banner year in 2020, with 9-month net trading income (NTI) at an all-time high of nearly $2 billion. Virtu also appears to be well-positioned to benefit from periods of heightened volatility and volume in [...]

By |November 13th, 2020|For Subscribers|

Trading Strategy Secrets: Hiding in Plain Sight

"Between stimulus and response there is a space. In that space is our power to choose our response. In our response lies our growth and our freedom."Viktor Frankl Alphacution's exploration to tease insight from the available data - to make the data dance - continues to expand. Sometimes this is due to weaving a new and unfamiliar data source. And, sometimes it's due to seeing something entirely new in a familiar dataset. A challenge in the process is [...]

By |November 11th, 2020|For Subscribers|

Summary: 2020 Order Routing Revenue Expected to Exceed $2 Billion

"The opportunities that everyone cannot see are the real opportunities."Jack Ma When counting the top four retail brokerage platforms engaged in payments for order flow - including Robinhood, TD Ameritrade (along with TD Ameritrade Clearing - both of which currently in the process of being acquired by Charles Schwab), E*Trade (now a unit of Morgan Stanley), and Charles Schwab - Alphacution estimates YTD order routing revenue for 2020 thru the third quarter is nearly $1.8 billion. Of these [...]

By |November 9th, 2020|For Subscribers|

Robinhood: Q3 Order Routing Revenue Continues to Break Records

"Do not go where the path may lead, go instead where there is no path and leave a trail."Ralph Waldo Emerson The juggernaut that is the Robinhood commission-free trading app has accumulated some dents and bruises over the year, along with a number of truly breathtaking successes. One of the more overexposed stories in a year engorged with superlatives, system outages, a customer suicide and, most recently, the hacking of thousands of accounts has challenged Robinhood's meteoric rise [...]

By |November 2nd, 2020|For Subscribers|

Citadel Securities Picks Fight With SEC Over Crystal Ball

"If you are not paying for the product, then you are the product."The Social Dilemma In a rare display of miscalculation, Citadel may have overplayed its hand... Here's the setup: According to Bloomberg, "Citadel Securities LLC has sued the U.S. Securities and Exchange Commission (SEC) over the regulator’s approval of an order type introduced by stock-exchange operator IEX Group Inc." Approved by the SEC in August and launched on October 1, IEX's discretionary limit order type - or, "D-Limit" [...]

By |October 28th, 2020|For Subscribers|

Options Powerhouse IMC Financial Markets: Stung by Pandemic Volatility?

“The best way to differentiate the good from the bad is to look at economic incentives. Companies that sell you a physical product or a subscription are far less likely to abuse your trust than a company with a free product that depends on monopolizing your attention.Robert McNamee, Zucked: Waking Up to the Facebook Catastrophe Amsterdam-based International Marketmakers Combination BV - more commonly known simply as IMC - is one of the most legendary proprietary option trading powerhouses [...]

By |October 25th, 2020|For Subscribers|