[cj]

I have a Wealthfront account with quite a bit of money in it, and I deposit over 50% of my paycheck every week.

I sometimes look at how they’re investing the money on deposit. They often buy the same ticker at (radically) different prices.

The honest excuse is they spread the purchase throughout the day or at different times in the day.

But I’ve always had this suspicion that they might be doing something to boost their profits. I have zero proof or otherwise and don’t intend to defame them in any way.

But the reason I’m writing this is simply to share that there are a lot of businesses where the client really puts a ton of trust in the vendor. An insane amount of trust (literally your life savings) with very little assurances in return.

Without swift and strict enforcement of consumer protections and regulations, these sort of things will keep happening because it’s easy to steal from places where no one is looking.

[jarsin]

Just CTRL-F for Citadel in any of their agreements.

Guaranteed someone is paying to front run for them.

[ChainOfFools]

I have a family acquaintance who works at a fairly prominent hft shop in nyc. He's rather circumspect when I ask him about details of his job, which doesn't directly relate to trading but I get the impression he has to know quite a bit about how the various trade plans work, since he is deeply involved in maintaining the highly bespoke infra they run on.

After a few beers he'll sometimes start bringing up "customers purchasing order flow" from them, which apparently accounts for a significant part of their revenue. He's also indicated that this is not a practice unique to their shop but is fairly commonplace among companies that have highly advantageous (next-building or same-floor/dc equivalent latency) transport to various exchanges.

I assume, but am hesitant to ask directly, that this activity cannot actually be what it sounds like, but now I don't know.

[jarsin]

Payment for order flow is why we have commision free trading. So basically all brokers have these deals.

The SEC announced plans to end it, but my guess is they will be bought off so only the most powerful can participate.

Citadel and Jane Street are basically at either end off almost every trade making billions off fractions of pennies.