How is it legal to sell people’s trading order data to WS companies?

Jan 30, 2021 15 Comments

When RH first came out as “free” trading platform, everyone was so mesmerized. Now we are learning that they literally sell your orders to the third parties. Let that sink for a second..

Those third parties arbitrage your sell and buy orders and make billions without producing zero value to the economy or people. And with zero risk! How is that even legal?? #personalfinance #investments

So looks like the real customers for RH WS titans, and little men are the products.. am i missing something??

PS: Never used RH.

comments

Want to comment? LOG IN or SIGN UP
TOP 15 Comments
  • Roughly the same explanation of how it is legal for FB to sell user data to advertizers?
    The FB users are the products...am I missing something?

    Market makers add liquidity to the market and requires complex infrastructure and risk management to support the operation.
    Jan 30, 2021 8
    • OP
      I don’t know better. Actually I have near-zero financial expertise. I am simply saying that, as a layman, “The fact that trading information is sold and used for easy profit sounds wrong”. I don’t care if they are called money makers, hedge funds or purple unicorns. Give that kind or access and control to a high school student and he will be rich in a week. Plain and simple.

      But you share reading assignments.
      Can you summarize your position with a simple layman terms just like I did?
      Jan 30, 2021
    • Precisely, do more readings to understand how finance works.
      Just like layman thinks FB selling user data sounds wrong but you know how it really works. You are sounding exactly like them.
      Jan 30, 2021
  • This comment was deleted by original commenter.

  • Amazon
    hFOT08

    Go to company page Amazon

    hFOT08
    First of, most brokerages do that to some extent. Second, that has been true about RH from day 1, I don't get why people are surprised by this. Due diligence before investing and all that...
    Rest of what you said is situational. Hedge funds exist to create profits for millionares. They spend a large portion of those profits to lobby congress. Citadel is hardly the worst player here, they only make up 40% or so of RHs flow based on recent information. This is how the us economy works and has worked since basically forever.

    I guess my point is, whatever opinions you hold about this mess, and make no mistake this is a major potentially market crashing mess, surprise should not be one of them. This is how the poor people have been screwed over since the current economy took shape back at the start of the 1900s, and its not likely to change without significant corrections, both in market value and political landscape.

    Tldr; buy gme stonks and be prepared to lose all your money when the entire stock market crashes back to the low 200s: not market advice, just opinion.
    Jan 30, 2021 2
    • OP
      Thanks for you explaining. I agree with you. My point was, as a layman, if I have all the information on buy and sell orders of anything , there is no way for me to lose money. I am not a finance person, but that seems wrong to me.

      That said I never used RH. Fidelity’s been good.
      Jan 30, 2021
    • Amazon
      hFOT08

      Go to company page Amazon

      hFOT08
      That's not how the likes of citadel make their money though. Let me get home, will post some reading links, or search on Twitter for @unusual_whales and start reading some of the people he's retweeting.
      Jan 30, 2021
  • Market makers add tremendous value to the market. Arbitrage is one of the ways markets remain efficient. They do it for a profit, of course. Although what they do may be considered shady, saying they add zero value is an exaggeration.
    The fact that rh sells trades became public knowledge 2-3 years ago. I had used RH even after knowing that, but the recent fiasco is much worse than routing of trades imo.
    Jan 30, 2021 0