Robinhood

Happy Robinhood IPO Day, Suckers! Alphacution Publishes “The Robinhood Effect”

In this 193-page, 272-exhibit, 30,800-word case study, “The Robinhood Effect,” Alphacution brings together data and modeling from 25 entities – 11 retail brokers and 14 wholesale market makers – to explain a new phenomenon that now lives at the center of the US capital markets ecosystem. Alphacution’s most ambitious research project to date, this report covers the governing liquidity economics framework that defines PFOF rates, the mechanics of Robinhood’s aggressive retail brokerage model, the transformation of the retail brokerage industry, the sophisticated strategy architectures of wholesale market makers, and the “retail flow factors” that impact all market actors in the ecosystem – among many other themes and avenues for future research. An executive summary is available for review and download by open subscribers (w/ free registration). The complete case study is available to premium subscribers or via individual report purchase.

By |2021-07-29T02:56:14-04:00July 29th, 2021|For Subscribers|

Alphacution Press: Money Magazine on Upcoming Robinhood IPO

Mallika Mitra is a reporter at Money, covering investing trends, retirement, and debt. Her recent article, "Robinhood IPO: What to Know Before Investing," was published on June 2, 2021 based, in part, on Alphacution's ongoing analysis of Robinhood, its business model, and its impacts on the broader capital markets ecosystem.

By |2021-06-09T22:07:50-04:00June 3rd, 2021|Press|

A Regulatory Outlook for Off-Exchange Market Makers in the Aftermath of the GameStop Hearings

Alphacution contributor, Stanislav Dolgopolov, provides a detailed review of potential regulatory issues - including payment for order flow (PFOF), the multiplicity of roles of off-exchange market makers, and their informational advantages, among others - that may receive new scrutiny in the aftermath of the GameStop congressional hearings.

By |2021-05-26T21:57:00-04:00May 26th, 2021|Open|

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|

Note to The Market Structure Club on Comparative Order Routing Rates

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...

By |2021-05-14T22:56:19-04:00March 17th, 2021|For Subscribers|