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by minimax
4574 days ago
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Retail traders are, generally speaking, uninformed traders (relative to the rest of the market). As a result, retail order flow is extremely lucrative for market makers. There is little risk they'll get run over by a large informed trader if they know they are only trading against retail orders. For that reason market makers are willing to pay retail brokerages for their order flow. That's what happens at many of the retail shops (ameritrade, etrade, etc). I guess what I'm saying is that if you are a retail trader you are the product regardless of commissions. |
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