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by skybrian 1673 days ago
You'd think that, but apparently retail customers get better prices because market makers are more likely to lose money trading against a professional who knows something is coming, and the smaller spread from lower risk for them is enough to pay for the business model. They still make money on the spread but it's lower.

It's a bit weird that it works that way, but there is a logic to it. Price discrimination can work in your favor.

(And having gotten many literally free lunches from an employer, there is no harm to it if you know why they do it.)

1 comments

Got it. Sounds interesting. Just one remark about it, europe seems to be banning practices related selling the order flow. As you said it sounds a bit weird. Lets say non transparent. So maybe you don't always get a good deal.

PS: Crypto isn't always better in this regard since, there are some frontrunners and so on. The difference is that it is completely transparent.