Market Makers – Eq Muscle Release Thu, 22 Jul 2021 02:50:00 +0000 en-US hourly 1 Market Makers – Eq Muscle Release 32 32 Young players bite CommSec & Nabtrade ankles Wed, 21 Jul 2021 22:48:36 +0000

Australia may not yet have the zero-cost brokerage model for local stocks popularized by the US platform Robinhood – or not yet anyway – but that hasn’t stopped young Australians from finding out. the pleasures of stock trading.

Call them Millennials or Zoomers, they used their last lockdown time to good effect. Plus, they don’t just trade “meme” stocks plugged in by dubious influencers on Reddit or TikTok.

Trends bode well for Personal wealth (SFW), the only listed low-cost brokerage that works with a flat fee of $ 9.50 per trade.

The company claims to be the fifth-largest retail broker in the country overall, with a 7% market share in a market competed by as many as 40 vendors.

“We have grown at a fantastic rate over the past 18 months from where we were at the start of the pandemic,” said CEO Cath Whitaker.

On Monday, the company’s shares resumed trading after a $ 10 million placement at 39 cents, a 9% discount. A share purchase plan is expected to raise an additional $ 2 million.

The funds will be used to support “aggressive” expansion, such as the launch last November of a US platform to trade US stocks (just in time to ride the surge in trading sparked by Gamestop’s short-selling frenzy) .

This month, the company announced plans to add a cryptocurrency trading platform, after a survey of 3,500 of its clients found that 30% had invested in “cryptos” and An additional 38% intended to do so.

Under the no-fee model that has flourished in the United States, brokers earn their money from fees paid to so-called market makers: middlemen who consolidate transactions and execute them at a slightly lower price. to that stipulated in the order.

It is a volume based margin game.

Australia does not have toll-free brokers, but competition is certainly increasing in the low-fee industry.

Whitaker describes competition as a ‘look left, look right’ case.

On the left are the brokerage operations of the Big Four Banks – run by the monolithic Commonwealth Securities – and CMC Markets (which is in alliance with ANZ Bank).

“When I look closely, it’s the newcomers like Superhero, Stake or Raiz and Spaceship with a slightly different offer than ours,” she says.

Superhero, which offers local $ 5 trades and free trades in US stocks and ETFs, has been splurging on prime-time advertising. Stake plans to expand its trading offering from the US market to ASX.

The other strong competitors are eToro in the United States and IG Markets in the United Kingdom.

SelfWealth claims to be the only low-cost platform to offer direct legal property rights with Holder Identification Numbers (HINs) rather than custodial agreements.

Two intermediary custodians, BBY and Halifax Investments, have gone bankrupt over the past five years, while Opus Prime imploded during the global financial crisis.

The approximately 12,000 clients in Halifax only recently announced that they would recover their shares following the broker’s collapse in November 2018.

“This is not a theoretical discussion, it has hurt thousands of Australians,” Whitaker said.

However, Whitaker believes that near-zero competitors will emerge in the local market, using a loss-making strategy based on generating revenue from foreign exchange fees or other peripherals.

“In the digital world, you pay for the product or you are the product, they’re going to make their money one way or another,” she says.

Whitaker says investors should be asking how these companies make their money.

“If something is too good to be true, it just might be,” she said. “We would be happy to have a conversation with ASIC to make sure the risks are understood by mom and dad’s investors.”

Younger investors are seen as being too influenced by questionable online advice, but Whitaker says they’re more diligent in their research than one might think.

While trendy sectors such as buy now, pay later (BNPL) stocks have been popular with novice traders, iron ore miners have been popular as well.

“The big four banks were among the most traded stocks in May,” she said, adding that investors are more wary of BNPL stocks.

SelfWealth’s quarterly report in June showed revenue increased 22% to $ 5.11 million, with positive cash flow of $ 140,000 (just over $ 1 million overall. year 2020-2021).

The number of active customers increased by 105% to 95,189.

Compared to the March quarter, however, revenue fell 11% and the number of transactions was down 30%.

SelfWealth shares have fallen about 30% in the past 12 months, but they still nearly doubled their November 2017 listing price by 20 cents apiece.

While the company’s $ 80 million market valuation appears modest, the challenge for management is to shift to profitability.

In underlying terms, the loss for the year through June 2021 is expected to decrease to between $ 400,000 and $ 900,000, compared to a deficit of $ 2.9 million for the year 2019-2020.

The actors of Minnow tread the boards of the ASX

Meanwhile, SelfWealth’s ASX “orphan” status is set to be challenged by two new entrants, albeit with different product proposals.

After raising $ 10 million in IPO funds, OpenMarkets plans to go into debt later this year.

OpenMarkets is more about providing business-to-business services to other brokers (including SelfWealth). Behind the scenes, he clears more than $ 50 billion in transactions per year, on 200,000 accounts.

But it also has an Open Trader trading platform, a “self-managed” platform for “serious active investors”.

Perth-based Marketech is planning an IPO for its platform, which targets “serious active investors” with add-ons such as live streaming.

In June, the company toured for $ 1.5 million from investors, including former Afterpay director (and first investor) Mike Jefferies.

Dare dream …

Meanwhile, the remaining listed full-service brokers show a mixed picture, with shares in Bell Financial Group (BFG) 41% raised in the last year and 180% in the last five years.

Following the acquisition of local rival Hartleys, the Perth-based company Euroz Hartleys (EZL) said it would pay a final dividend of 13.5 cents, which equates to a practical 8% full-year return.

Euroz shares have gained 87% and 155% over one and five years respectively, but the broker relies on dynamic mining conditions in WA.

Now known as E&P Financial Group (EP1), Evans Dixon has lost 70% of its value since its listing in 2018. As part of a negotiated settlement this month, the group agreed to pay a fine of $ 7.2 million for failing to act in the best interests of clients by directing them to a related US real estate

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Daimler says chip shortage could hurt 2021 sales By Reuters Wed, 21 Jul 2021 05:35:00 +0000

© Reuters. FILE PHOTO: A Mercedes-Benz Vision AVTR concept vehicle is shown on a media day for Auto Shanghai in Shanghai, China April 19, 2021. REUTERS / Aly Song

LONDON (Reuters) – A global shortage of semiconductor chips will reduce car sales in the second half of 2021, according to automaker Mercedes-Benz Daimler AG (DE 🙂 said Wednesday, but left its profit margin outlook for the year unchanged.

Daimler (OTC 🙂 is among the major automakers that have had to cut production this year due to the shortage caused by the coronavirus pandemic.

The shortage comes as demand for cars has increased as the global economy recovers from the ravages of COVID-19, pushing up prices for new and used vehicles as inventories decline.

Second-quarter Mercedes-Benz car sales jumped 27%, with a 54% jump in Europe, Daimler’s second-largest market after China.

The company said it now expects full-year car sales to be in line with 2020 levels. Earlier, the German automaker said it expects unit sales to be in line with 2020 levels. cars this year are significantly higher than last year.

The company also confirmed on Wednesday that the group’s adjusted second-quarter profit before interest and taxes (EBIT) was 5.42 billion euros ($ 6.38 billion), with the auto and truck divisions exceeding analysts’ targets. .

Daimler released preliminary results last week.

($ 1 = € 0.8495)

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Why NIO shares fell and then recovered today Tue, 20 Jul 2021 20:03:39 +0000

What happened

Chinese manufacturer of electric vehicles (EV) NIO (NYSE: NIO) has a market capitalization over $ 70 billion, so a small percentage move of the stock doesn’t have too much of an impact. But investors may have reacted to the loss of a frame this morning when the stock fell more than 2% early in the session. However, the stock reversed course and at 3:30 p.m. EDT, stocks were up 2% on Tuesday.

So what

The initial drop may have been in response to the announcement that the company’s vice president for software product management was leaving to work for General Motors (NYSE: GM). Rachad Youssef has become a product manager for GM’s BrightDrop EV subsidiary, effective immediately. GM already has a significant presence in China, and the poaching of an NIO executive may have worried some investors. But BrightDrop is currently not a direct competition for NIO, which could explain the reversal that put stocks in the dark today.

NIO ES8 electric SUV. Image source: NIO.

Now what

There is no doubt that NIO will face increasing competition in its home market. Much of this will initially come from other Chinese electric vehicle manufacturers. But global automakers will also increase sales of electric vehicles there. GM already has a large company there for traditional internal combustion vehicles and new energy vehicles. In the second quarter of 2021, GM said it delivered more than 750,000 vehicles to China, including more than 90,000 electric vehicles under joint venture partnerships. As a prospect, NIO delivered just under 22,000 of its electric vehicles during the same period.

GM’s BrightDrop won’t be in direct competition at this time, as it initially focuses on electric commercial delivery vehicles and a related ecosystem. But NIO shareholders will need to be comfortable with volatility. At its current valuation, it will need to grow significantly, and any bump along the way could scare some investors off, which could be the start of today’s trading session.

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In depth: Citadel Connect and Dark Pools discovered Tue, 20 Jul 2021 09:52:06 +0000

Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please review our website policy before making any financial decisions.

Before dark pools, institutional investors had to trade blocks of shares outside of trading hours to avoid disrupting the market. Now the utility found in dark pools is so high that some market makers have incorporated them into their operations. There are certainly advantages here in terms of increased liquidity, but there is also another side of the coin.

Throughout 2021, retail traders discovered significant short positions held by hedge funds in a number of stocks. Naked short selling is suspected by many retail traders to be involved. At this point, hedge funds have collectively lost $ 12 billion – so far.

One of the latest developments in this saga is Citadel Connect, a dark pool operated by Citadel Securities.

Citadel Securities and Citadel Connect

If you haven’t followed the WallStreetBets saga in multiple Senate Banking Committee hearings, here’s a quick recap. As the largest Designated Market Maker (DMM) on the NYSE and accounting for 47% of US retail trading volume, Citadel Securities LLC also accounted for a significant portion of Robinhood’s revenue in Q1 2021. thanks to Robinhood’s PFOF (payment for order flow). business model.

PFOF is a very controversial practice because it tends to cause conflicts of interest, which is why it is illegal in many Western countries (UK, Canada and Australia). Current SEC Chairman Gary Gensler noted some places of his abuse on June 9e.

“Payment for order flows raises a number of important questions. Do brokers have inherent conflicts of interest? If so, are clients getting best execution in the context of this conflict? Are brokers encouraged to encourage clients to trade more frequently than in the best interests of those clients? “

In the same statement, Gensler further noted that around 9% of January’s trading volume was executed on Alternative Trading Systems (ATS), commonly referred to as dark pools. True to their nickname, Dark Pools have the effect of obstructing market resolution. In stock market parlance, the aggregate quotation report on the bid-ask price spread – the National Best Bid and Offer (NBBO) – is skewed, as Gensler himself noted:

“First, as evidenced in January, nearly half of the commercial interests in the equity market are either in dark pools or is internalized by wholesalers.

Internalization means that the order is not routed to the market maker but that the broker himself fills the order from his stock inventory. For example, Citadel Securities was fined $ 22 million in 2017 for “misleading statements suggesting that it would provide or attempt to obtain the best prices that it has seen for retail orders routed through other brokers,“.

Continuing with the dark pools, Gensler then concluded the following:

“Dark pools and wholesalers are not reflected in the NBBO. In addition, the NBBO is as good as the market itself. Thus, within the framework of the current market segmentation, nearly half of the exchanges as well as a significant part of the orders of the retail market take place outside the informed markets. I think it may affect the bid-ask spread width. “

Citadel Securities owns and operates one such dark pool out of the 50 currently in the United States, called Citadel Connect.

What is a Dark Pool and can it be abused?

Alternative Trading Systems (ATS) or Dark Pools are private exchanges that have liquidity advantages but can also hide trades. Together with internalisers, they represent over 40% of the global stock market. Dark pools gained ground after 2005, following the SEC’s adoption of the National Market System (NMS) regulation. NMS modernized the stock market to make it as we know it today. Therefore, dark pools are completely legal and regulated.

However, they are called dark because the orders do not appear in the stock exchange order books. The obvious purpose of this feature is to stabilize the market, so that when large orders from institutionalized investors are placed, other market participants are not alerted. Otherwise, with the size of the order in the open – in the enlightened market – other participants would be able to trigger a downward price change.

By preventing this from happening, dark pools increase market liquidity and efficiency. However, in the same way that dark pools eliminate transparency by design, they can also hide conflicts of interest. Here are some historical examples that demonstrate the ways dark pools have been abused:

  • On October 3, 2012, SEC accused eBX LLC of failing to protect the confidential information of its subscribers, allowing third parties to use that information.
  • On June 6, 2014, the SEC accused a New York broker of mishandling confidential information and using it for marketing purposes.
  • On January 15, 2015, the SEC accused UBS Securities LLC of failing to disclose a type of order that it issued exclusively to market makers.
  • On August 12, 2015, the SEC indicted ITG and AlterNet Securities for operating a secret trading desk and misuse of confidential trading data.
  • On January 31, 2016, the SEC indicted Barkley Capital and Credit Suisse for numerous violations, including the execution of 117 million illegal subpenny orders.
  • On September 14, 2018, the SEC accused Citigroup of misleading dark pool users and of routing orders on other trading venues.
  • On November 7, 2018, the SEC indicted ITG and AlterNet Securities again for violations similar to last time.

This gives you insight into the range of abuse occurring in dark pools. That said, as a private exchange, each private pool has its own rules and limits. For example, some only allow large orders or blocks, while others focus on high frequency trading (HFT), which is how dark pools gained popularity in the first place.

The most common abuse found in dark pools is so-called front running. Knowing that a trader is about to execute a trade, another trader can first trade the stock – sell or buy – then sell it to meet the initial demand – at a profit.

Interested in DeFi? Join our Telegram group and never miss a milestone development.

Is Citadel Connect a Dark Pool?

Numerous reliable reports suggest that Citadel Connect is indeed a dark pool. Interestingly, however, Citadel Connect is not registered as an ATS, nor does it report its trading volume to FINRA, which is overseen by the SEC, according to a 2015 Reuters report:

“Unlike Apogee, Connect is not classified as an ‘alternative trading system’ and does not report volumes to FINRA.”

In the same article, Reuters reported that Citadel Securities was aiming to shut down its previously registered dark pool called Apogee in 2015, as Citadel Connect had already outperformed it by five times. The market maker itself refers to Connect as “over-the-counter trading” or “immediate order or cancellation (IOC) platform”. Among its offer are the following features:

  • Single core liquid deep
  • Minimize the impact on the market
  • Intelligent order routing

These characteristics correspond to the objective of dark pools. However, SEC Chairman Gary Gensler differentiated between dark pools (ATS) and over-the-counter wholesalers, observing that:

“That leaves around 38%, most of which were executed by over-the-counter wholesalers. Only seven wholesalers represented the vast majority of this group…. Within the space of over-the-counter market makers, we are seeing a concentration. One company has publicly stated that it is running almost half of all retail volume. “

As you can see, the market is all about the flow of information and which entities have positioned themselves to best exploit that flow of data.

“… given that a large and growing portion of retail orders are channeled to a small, concentrated group of wholesalers, some market makers have more data than others.

As we have seen in many other parts of our economy, there are a few central players benefiting from the growing use of data, whether in research, e-commerce or, in this case, transaction flow data. .

It’s impossible to say how this state of affairs applies to the short squeeze of memes stocks until the conclusion itself unfolds.

Do you think Citadel Connect is being used to benefit all parties involved with additional liquidity as proclaimed by spokespersons for Citadel Securities? Or is there another part of the in-game image that is finally uncovered? Let us know your thoughts in the comments below.

About the Author

Tim Fries is the co-founder of The Tokenist. He has a BSc in Mechanical Engineering from the University of Michigan and an MBA from the Booth School of Business at the University of Chicago. Tim was a Senior Associate in the investment team of RW Baird’s US Private Equity division and is also a co-founder of Protective Technologies Capital, an investment firm specializing in detection, protection and protection solutions. control.

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Grill makers gearing up for all-American IPO Mon, 19 Jul 2021 18:53:00 +0000

A Weber grill stands on a porch in Gloucester, Massachusetts, United States, July 13, 2021. REUTERS / Brian Snyder

NEW YORK, July 19 (Reuters Breakingviews) – Stock markets are serving up red meat to al fresco dining enthusiasts. Traeger and Weber, makers of backyard grilling machines, have both filed for an initial public offering. One is more trendy, while the other is bigger. Both sport the required IPO buzzwords about technology and recurring revenue streams. What one has in terms of market penetration and variety, the other makes up for with the cachet of the brand – suggesting they could end up with a similar valuation.

Traeger, based in Salt Lake City, specializes in pellet fueled grills. The company run by Jeremy Andrus sold 2 million grills in the United States between 2016 and 2020. Weber, based in Palatine, Illinois, and led by Chris Scherzinger, has sold 50 million grills worldwide, roughly two-thirds the United States. , where it has a 23% market share. Weber barbecues are aimed at a wider market: they run on gas, charcoal, wood pellets or electricity.

Both brands have pricing power. Take their gross margin – actually their profit margin on the products they manufacture. Traeger was at 41% and Weber at 44% in the six months leading up to March 31. After that, their finances are very different. Traeger’s revenue nearly doubled to $ 369 million in the six-month period ended March 31, and went from a loss to a small profit. Weber’s revenue rose 62% to $ 963 million and his profits tripled. Weber derives more than a quarter of its revenue from add-ons like fuel and utensils, compared to a fifth at Traeger.

In all of the preparation, Weber looks like a winner. Outdoor brands Yeti (YETI.N), Newell Brands (NWL.O) and Thor Industries (THO.N) are trading an average of 3 times expected sales this year, according to Refinitiv. If Weber’s pandemic-fueled growth fades to half its most recent 62% rate, it could generate $ 2.5 billion in revenue in the 12 months ending next March, making it is worth $ 7.5 billion. Trager, by the way, would only be worth $ 3 billion, unless he could argue that his luxury deserves a big bounty.

Wall Street has already chosen its winner. Weber’s latest filing has three of the top five underwriters for IPOs in the United States this year, namely JPMorgan, Goldman Sachs and Bank of America. Traeger’s owner, TGPX Holding I, has one: Morgan Stanley. There is room in the market for both grill makers, but being the larger and more established of the two, it may not be surprising that Weber has brought more fee-hungry banks to the backyard. .

To pursue @alpgomez on Twitter


– Grill makers Weber and Traeger have both filed for IPOs in the United States.

–Weber reported revenue of $ 963 million for the six months ended March 31 and net profit of $ 73.8 million for the same period, according to a file released on July 12.

– TGPX Holdings I, owner of Traeger, reported revenue of $ 236 million and net profit of $ 38.9 million for the quarter ended March 31, based on a file released on 6 July. The company will change its name to Traeger once it goes public.

Editing by John Foley and Marjorie Backman

Reuters Breakingviews is the world’s leading source of financial agenda information. As the Reuters brand for financial commentary, we dissect big business and economic stories from around the world every day. A global team of around 30 correspondents in New York, London, Hong Kong and other major cities provide real-time expert analysis.

Sign up for a free trial of our full service at and follow us on Twitter @Breakingviews and at All opinions expressed are those of the authors.

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U.S. Financial Agencies To Meet To Discuss Future Impact Of Stable Coins By Cointelegraph Sun, 18 Jul 2021 20:20:00 +0000

U.S. financial agencies to meet to discuss future impact of stablecoins

US Secretary of the Treasury Janet L. Yellen plans announced convene the President’s Financial Markets Working Group, or PWG, as well as the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation to discuss possible inter-institutional work on stablecoins. The meeting is scheduled to take place on Monday July 19.

Secretary Yellen said: