Order Routing

TD Ameritrade’s Q2 Update: To Infinity or Oblivion?

"Just when I thought I was out, they pull me back in." - Michael Corleone, The Godfather: Part III   Chicken or egg? For today's story, we know which one came first. However, we may never know for sure which one was the more prominent cause of the recent sustained spike in US stock volumes: A frictionless environment brought on by a zero-commission framework or a high-volatility market brought on by a once-in-a-century global pandemic? Granted, there may be additional factors at play here. Like the gamification of market interfaces as substitution for a sports apocalypse. People need something to do. And, when confined for extended periods, they will naturally choose paths of least resistance, especially those that entertain, are addictive and tickle financial desires... This is what one of those paths looks like; notably since March 2020: Now, I made a point last week, in "Robinhood's Trailing Stop Orders: Extreme Profitability, By Design," to say that we would try to avoid seeming redundant in our topical choices, at least [...]

By | 2020-07-23T20:10:01-04:00 July 23rd, 2020|Alphacution Feed|

Robinhood and Payments for Order Flow

It was a recent father-son (and dog) road trip. Several hours in the car, on our way to support daughter / sister, Emma, at her final regatta of the season. Head of the Hooch in Chattanooga, Tennessee. And, an opportunity for some undistracted conversation. Among the many topics was our ongoing debate about how to trade Tesla (TSLA). Eddie has proven himself to be fairly decent scalper of this volatile name, so I usually ask how he is positioned and the levels he thinks are meaningful. Anyway, it turns out, he is trading on the Robinhood platform - no more than a few shares at a time - and paying zero commissions which, of course, improves his net profitability. This is the main attraction on top of the fact that he can toggle between trading stocks, playing video games, watching YouTube, Instagramming with his friends and listening to music all on the same device. (No wonder he is always wiped out!) So, this got me to thinking about some of [...]

By | 2020-03-01T21:53:43-05:00 November 14th, 2018|Alphacution Feed|