| Author | Source |
|---|---|
| u/neoquant |
Almost everything people discovered here was right. Shocking
My main outtakes:
market is manipulated (short ladders and spoofing/layering are real) - Dave actually analyzed historical deep market data himself
last two FINRA meetings have been „interesting”
our orders never actually reach the real exchange, internalization of retail orders is actually terrible for the market, especially in combination with PFOF and frontrunning - orders are only send to exchanges as the last resort as they are the most expensive - basically called toxic exhaust (LMAO)
more insights needed here in order to understand how OTC (internalizers) and Darkpools (called also ATS, alternate trading system) are actually preventing price discovery on the actual exchanges - Dave is not sure how price suppression and „walls at 180 bucks” would work involving Darkpools. Needs more investigation and inputs here. Still, you cannot trade and quote outside NBBO as this would be illegal (rule 611). But actually for layering you do not really need Darkpools as this needs to happen on the open market
GME OTC average trade size dropped from avg. 250 shares in late 2020 to about 40 shares since Jan 2021 for Citadel and Virtu - same shares traded back and forth or just retail piling in? - make your own conclusions
price discovery mechanisms are completely broken in todays markets aka price does not matter and is artificial
shares are rehypothicated multiple times and this is real
Dave is looking into mechanisms how the FTD figures can be manipulated and mentioned specifically the different option strategies discussed in the subreddit - so yes, FTD official figures are just garbage and only tip of the iceberg
as many as 90-99% of all orders in the market are possibly from HFT firms, when they stop quoting we see gap ups and gap downs - these gaps are sometimes just illiquidity contagions (aka flash crashes) and not actual manipulation
due to increased HFT role and very low latencies, the market became more fragile as the HFT strategies incentivized by speed lead to self similarity
regulators are not blind, just very very slow (one of his proposed changes took 7 years to implement…) - regulators are struggling to keep up with complexity and amount of data
most fines are unfortunately just „slaps on the wrist” and „corruption inherent in the system and the revolving door”, „fines are nothing compared to the damage caused” and „seen just as cost of doing business” - so basically „trying to enforce best execution is like trying to nail jello to a wall”
Last but not least: we should voice the issues to the SEC, Representatives etc. The more attention and pressure there is on the topics and concerns, the more likely people will see meaningful change implemented
Thanks Dave! Amen apes. Hodl. 🚀
Please correct me or add stuff if I am wrong on any point.
Not a financial advice. Only for entertainment purposes 🤡
PS:Â https://youtu.be/AYct0XX0uTU
TLDR: 👊🍦🚀