retail brokers

The Mother of All PFOF Charts – Q3 2022 Edition, Part II

Part II - Equity PFOF Volumes / Wholesaler Market Shares: Alphacution organizes and distills 33 months of payment for order flow (PFOF) data from 14 retail brokers and 13 wholesale market makers to place a wide-angle frame around the US Securities and Exchange Commission's upcoming proposals for a major equities market structure overhaul...

By |2022-12-14T23:26:37-05:00December 14th, 2022|For Subscribers|

The Retail Flow Factor: Hiding in Plain Sight

In this introduction to the 17-page, 21-exhibit presentation – Part III of Alphacution’s case study on payment for order flow (PFOF) – we present our preliminary development of the “retail flow factor” for 2020 based largely on a reconciliation of 606 data (from 10 retail brokers / 11 entities) and 605 data (from 7 wholesale market makers). The results include estimated monthly penetration of retail order flow relative to the full U.S. cash equities market for 2020 – including estimated breakdowns of odd lots and round lots – as well as some hints on where we will need to look next to further refine this factor in preparation for extending this analysis throughout 2021 and beyond…

By |2021-06-03T01:03:27-04:00June 3rd, 2021|For Subscribers|

Alphacution Publishes Payment For Order Flow 2020 – Part II: Broker Personas

In Part I of Alphacution’s case study on payment for order flow (PFOF), we focused mainly on the rates paid by wholesale market makers to retail brokers under a full range of securities categories and order type scenarios. In this 22-page, 20-exhibit deck, Alphacution presents PART II of its upcoming comprehensive case study, The Robinhood Effect, with a focus on a concept called broker personas. Alphacution’s working hypothesis on this topic is that each retail broker – in fact, all order flow intermediaries – have a unique persona. This persona – a unique pattern formed by order type distributions – is a distillation of client trading behaviors. In this presentation, Alphacution demonstrates that broker personas are partly due to investor demographics and, more interestingly, partly due to broker influence. Furthermore, when we broaden our perspective to consider that retail brokers are now compensated for trade flows largely by their wholesaler counterparts, we see a clearer picture of how desired outcomes could be manufactured…

By |2021-05-14T22:20:44-04:00May 14th, 2021|Open|