more to the gamestop story

[rdking647]

a simplfied explanantion


heres a little known fact.
the reason Robinhood (and others) can offer commisison free trading is they get paid for order flow.
when you place an order rather than sending it straight to the exchange the send it to a third party market maker
these market makers match your order with other offsetting orders and in the process take a small piece of change in the process. for example they may sell you stock at $10.0075 and buy it from the other party at 10.005. thats 1/2 a cent doesnt sound like much but if they do it on 10m shares a day thats 50k a day.
one of the larger market makers is run by citadel which surprise surprise is also a hedge fund operator. and they bailed out a fund that got blown up by the gamestop trade to the tune of billions.
robinhood stopping of people buying cretain stocks caused those stops to crash. companies (like citadel) who were short those stocks made a fortune.....
just another example of how wall street needs to be reigned in .

[hibbing]

1. Interesting n/t

[empedocles]

2. 'Follow the money', it's more complicated than it looks.

[rickford66]

3. A $0.0001 tax on every share bought would raise a lot of money.

[ansible]

4. They weren't reigned in back in 2008, why would it be any different now?

The rich get richer and we'll be told to shut up and take it

[bamagal62]

5. The whole thing makes my brain hurt.

[Wellstone ruled]

6. Citadel owns E-Trade who

is a Market Maker for stocks that are lagers or over sold . Phil Griffen is Citadel which by the way is two hedge funds known to trade stocks between each other in order to pump or dump what ever the flavor of the day is.