Read on Twitter
NOBODY discusses this. They Need To.
When retail orders are herded and hoarded by high frequency wholesalers - its REALLY good for the wholesalers buying the orders.
But not so good for ETFs, Mutual Funds, and other money managers - who by the way represent long term investors.
When retail orders are herded and hoarded by high frequency wholesalers - its REALLY good for the wholesalers buying the orders.
But not so good for ETFs, Mutual Funds, and other money managers - who by the way represent long term investors.
"We have found that impact costs for stocks with a high retail market share were three times as expensive as stocks with low retail involvement" https://www.babelfishanalytics.com/news/2021/2/4/meme-stocks-inaccessible-trading-share-trading-cost-and-risk
Why?
1) retail orders are small. Low alpha. uninformed. Interacting with them tends to lower transaction costs.
2) If Institutions cant touch the retail flow - what they are left with is the backwash. The intermediaries.
I do not want to drink backwash.
1) retail orders are small. Low alpha. uninformed. Interacting with them tends to lower transaction costs.
2) If Institutions cant touch the retail flow - what they are left with is the backwash. The intermediaries.
I do not want to drink backwash.
