Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
By the way, I glossed over one detail; the reason I round this first is because you invoke the Taylor expansion of sin(x) and cos(x) here - easy to evaluate when psi1 and psi2 are in 2 significant figures.
I actually was just about to post my response, enjoy! (More later.)
What we can say for sure is Peterffy has been a considerably successful trader long before starting IB.
So how do you know the majority of Timber Hill's trading advantage comes from customer flow?
Going by your post and its accuracy, that seems far from clear. You added $435.1M Trading Gains and $76.4M Other Income together to produce a rather misleading figure I think. More sense would have made to look at the breakdown of Other Income that I included in a screenshot, taken from your link. What you "conceded" to be lumped togegher is all stated separately.
Let's take a step back here to make sure we get this right. The filing says: "Payments for order flow are earned from various options exchanges based upon options trading volume originated by the Operating Companies." Operating Companies could be either IB or TH or both, do you know the breakdown? What are the involved options exchanges?
You don't seem to understand the difference between 'payment for order flow' and 'trading against its clients'. The $21.2M is the payment for order flow, it does not entail anything about the trading against your clients.
If I can peek at your orders before they hit the order book, then I can trade against you without giving you a payment for order flow. So between the two of us, the net revenue from payment for order flow is $0 but I'm still trading against you.
It is common knowledge why a 'broker' runs its own prop firm and passes order flow to its prop firm. Or why a FX dealer accepts retail accounts. Do note however that I'm not implying that this is unethical; in fact, I do think that what IB does is economically good for almost all retail traders. I'm just stating the fact. There's nothing else I can do to educate you about it if you're absolutely choosing to close an eye about it.
@Outlier: Save your time. I hope you're not offended by my curtness and hope you have a great weekend ahead. I'm going to sleep and call it quits, I've no time to get locked in an online debate and recommend that you don't either.
You too have a great weekend and as promised, here's what I did for a check.
I bent a piece of paper that I marked before. I wanted to see how curved it had to be for a chord to arc length ratio of 1.6 to 2.1. This gave me the intuition that the angle would have to be huge. I knew however the angle for that part of North America would have to be very small. Hence I could rule out adjusting for geodesics as an explanation for that large of a difference.
I am surprised he did not know this. (Jumping the Q)I have personally witnessed this numerous times in my trading. You have a limit order waiting at a price point. It hits your price but does not go through it. Then you wait and watch the DOM and the volume. If the price does not punch through your limit order you may not get filled even though you were waiting there for hours and plenty of volume has been executed. Even exceeding the vol that existed on the DOM as it reached the price.
Wow, What the hell are we up against. Rigged axchanges and Algorithms OMG, More for the argument of take the lot of the table and dont HOLD too long. You just never know when they will run the market against you. Lots of Luck
ANdrew