Messed Up Markets
If you believe in the fundamental premise that markets are the best pricing and capital allocation mechanism we’ve figured out so far, then you must also believe in free and open competition.
An IPO - or Initial Public Offering - represents one way for a company to enter the public markets. By partnering with an institutional firm (like an investment bank), a company is able to guarantee the sale of an initial block of shares.
A Direct Public Offering - or DPO - helps take a company public WITHOUT an underwriter (like an investment bank). This allows the company going public to raise money (similar to an IPO) but with less dilution (allowing them to retain more ownership).
A Special Purpose Acquisition Vehicle, or SPAC, is another method of taking a company public; known as a blank check, SPACs pool capital and merge with a target to help them onto the market without requiring an IPO.
The Life Cycle of An Order/Trade
How do institutional investors place orders? From investment managers to order management systems, this guide walks through how orders go from an idea to being added to the 'tape.'
The Retail Trading Pipeline
What happens when you press that buy button on your brokers app? Many things! Your order might get routed directly to a wholesaler (through Payment for Order Flow) or end up on a stock exchange.
Payment for Order Flow (PFOF)
Payment for order flow (PFOF) is the compensation and benefit a brokerage firm receives for directing orders to different parties for trade execution. The brokerage firm receives a small payment, usually fractions of a penny per share, as compensation for directing the order to a particular market maker.
The Conflict-Of-Interest Feedback Loop
The current market structure creates incentives for brokers to route orders for their own benefit, rather than for the best execution of their clients.
Citadel's Lawsuit Against the SEC Over IEX's D-Limit Order Type
Does the retail investor really stand to benefit from the market? Citadel is suing the SEC over the D-limit order type while claiming to represent individual investors - but, is this the case?
Order Routing Inducements - it's not just PFOF we should worry about
The current system of equity and option order routing is broken, with rebates and payments influencing how brokers route orders rather than execution quality resulting in a free-fall race to the bottom.
SEC Comment Letter How-To (Part 1)
Dave Lauer (Market Structure Specialist and Urvin Finance CEO) and Lisa Braganca (Former SEC Branch Chief) break down the importance of comment letters and just why they are SO important. Watch on to get involved in your markets!
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