Free Trading Is A Mirage, Market Guru Says: Here's How Retail Investors Pay For It
Portfolio Pulse from AJ Fabino
Urvin Finance CEO Dave Lauer and Benzinga host Dennis Dick discussed concerns about the current stock market structure and the need for reform. They highlighted the deceptive nature of commission-free trading offered by platforms like Robinhood Markets Inc (NASDAQ:HOOD) and SoFi Technologies Inc (NASDAQ:SOFI), stating that traders pay in the form of poor execution quality. Lauer also criticized the Payment For Order Flow (PFOF) structure, popularized by Bernie Madoff, which Robinhood uses. He praised the SEC's initiatives to enhance market transparency and reassess tick sizes.
September 08, 2023 | 7:48 pm
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NEGATIVE IMPACT
Robinhood's commission-free trading and PFOF structure were criticized for resulting in poor execution quality for traders. This could lead to increased scrutiny and potential regulatory changes.
The criticism of Robinhood's business model and the call for market reform could lead to increased regulatory scrutiny and potential changes in their business practices. This could negatively impact their stock price in the short term.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 80
NEGATIVE IMPACT
SoFi's commission-free trading model was criticized for resulting in poor execution quality for traders. This could lead to increased scrutiny and potential regulatory changes.
The criticism of SoFi's business model and the call for market reform could lead to increased regulatory scrutiny and potential changes in their business practices. This could negatively impact their stock price in the short term.
CONFIDENCE 80
IMPORTANCE 70
RELEVANCE 70