That's how they cheat retailer_老虎社区_美港股上老虎

Kyron_C
2021-07-30

That's how they cheat retailer traders in $GME and $AMC

EXPLAINER-Robinhood makes most of its money from PFOF. What is it?

By John McCrank NEW YORK, July 29 (Reuters) - App-based retail brokerage Robinhood Markets Inc

EXPLAINER-Robinhood makes most of its money from PFOF. What is it?

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Most retail brokers also accept rebates, or payments, from wholesalers in return for their customers' orders. HOW COMMON IS PFOF? PFOF, which is disclosed in quarterly regulatory filings, has been a growing source of revenue for many brokers as retail trading volumes have surged. Some retail brokerages, including Charles Schwab Corp and Robinhood, accept PFOF, while others, including Fidelity and Public.com, do not. PFOF is banned in Canada, the UK, and Australia. Robinhood has said PFOF allows it to offer commission-free trading. WHY DOES IT MATTER? The SEC is looking into whether PFOF creates an incentive for brokers to route customer orders to places that maximize PFOF rather than to the place that would get the customers the best execution. 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Securities and Exchange Commission Chair Gary Gensler also recently expressed concerns that commission-free trading brokerages may encourage investors to trade more, in order to capture more PFOF, even if that is not in the investors' best interest. IS REGULATORY SCRUTINY OF PFOF NEW? No. PFOF has been around for decades and the SEC has historically focused on disclosure of the practice, but its growth in recent years, as commission-free trading models have become the norm, along with an associated increase in off-exchange trading, has led to renewed attention. ISN'T FREE TRADING GOOD FOR EVERYONE? In December, the SEC fined Robinhood $65 million for failing to properly inform its customers about PFOF it received that resulted in those customers paying higher prices to execute trades. 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EXPLAINER-Robinhood makes most of its money from PFOF. What is it?

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