Day Traders Will Have Fun Until They Get Wiped Out

[dmedin]

Reality check for y'all ...

A handful might get rich while almost everyone else loses.

https://www.bloomberg.com/opinion/articles/2020-06-23/robinhood-traders-will-have-fun-until-they-get-wiped-out?srnd=opinion&sref=2o0rZsF1&utm_campaign=socialflow-organic&utm_content=business

[Monobrow]

Is this statement from the article true?

 

“....Day traders might think that because they’re paying zero commission, their trades are free. But when a day trader places an order, a trading algorithm somewhere quickly figures out that they want to buy or sell, and raises or lowers the price accordingly, so that the day trader gets a less favorable price....”

 

 

[Caseynotes]

2 hours ago, Monobrow said:

Is this statement from the article true?

 

“....Day traders might think that because they’re paying zero commission, their trades are free. But when a day trader places an order, a trading algorithm somewhere quickly figures out that they want to buy or sell, and raises or lowers the price accordingly, so that the day trader gets a less favorable price....”

 

 

Hi, doubt an algorithm could manage that for 150,000 clients simultaneously, i think someone would notice everyone was receiving different prices. 

[MissClaire]

Such a happy article LOL. It's true though, but we all know the risks, if it wasn't exciting we wouldn't do it.

[Kodiak]

On 11/07/2020 at 06:57, Monobrow said:

Is this statement from the article true?

 

“....Day traders might think that because they’re paying zero commission, their trades are free. But when a day trader places an order, a trading algorithm somewhere quickly figures out that they want to buy or sell, and raises or lowers the price accordingly, so that the day trader gets a less favorable price....”

 

 

"

That’s because it makes money through a complex practice known as “payment for order flow.” Each time a Robinhood customer trades, Wall Street firms actually buy or sell the shares and determine what price the customer gets. These firms pay Robinhood for the right to do this, because they then engage in a form of arbitrage by trying to buy or sell the stock for a profit over what they give the Robinhood customer.

This practice is not new, and retail brokers such as E-Trade and Schwab also do it. But Robinhood makes significantly more than they do for each stock share and options contract sent to the professional trading firms, the filings show."

https://www.nytimes.com/2020/07/08/technology/robinhood-risky-trading.html

[Kodiak]

"Some have visited Robinhood’s headquarters in Menlo Park, Calif., in recent years to confront the staff about their losses, said four employees who witnessed the incidents. This year, they said, the start-up installed bulletproof glass at the front entrance."

 

https://www.nytimes.com/2020/07/08/technology/robinhood-risky-trading.html

 

[dmedin]

Periods of mass unemployment are a great time to be a snake oil salesman (this was true in the 1930s as well, look up Dale Carnegie and the 'law of attraction' sh!te), I'm being bombared by new ads on how to trade and invest every day.  As Caseynotes says, these ads don't seem to be regulated - no warnings about 80% of people losing their shirts, or 'past results do not guarantee future returns' or anything of that sort.

To be honest, if you really want to escape misery and hell - run out in front of an incoming train  

[dmedin]

3 hours ago, Kodiak said:

"

That’s because it makes money through a complex practice known as “payment for order flow.” Each time a Robinhood customer trades, Wall Street firms actually buy or sell the shares and determine what price the customer gets. These firms pay Robinhood for the right to do this, because they then engage in a form of arbitrage by trying to buy or sell the stock for a profit over what they give the Robinhood customer.

This practice is not new, and retail brokers such as E-Trade and Schwab also do it. But Robinhood makes significantly more than they do for each stock share and options contract sent to the professional trading firms, the filings show."

https://www.nytimes.com/2020/07/08/technology/robinhood-risky-trading.html

 

 

The rich Tory boys in the City (and the cowboys on Wall Street) have a saying, 'Pigs get slaughtered.'

And by 'pigs' they mean retail investors :-)