E D I T O R ’ S
Q U E S T I O N
E D I T O R ’ S
Q U E S T I O N
JASON DELORENZO , OWNER AND PRINCIPAL OF AD DEUM FUNDS AND YOUTUBE PERSONALITY WIZARD OF OPS
ver the past few years , broker-dealers have
O innovated ways to attract and retain retail investors on their platforms . Most recently , brokerage platforms have reduced commissions to zero , instead using an auction process for market makers to obtain order flow ( most commonly known as payment for order flow , or PFOF ). Additionally , brokerages have designed apps that give the look and feel of a game rather than a serious investment tool .
Retail investors are becoming wise to these tricks and will begin to demand that brokerages provide data that helps them trade more effectively . Historically , these data sources have been closely guarded by large institutions and hedge funds , but the availability of data has increased , allowing savvy retail investors the opportunity to use tools like AI to gain an edge . As a result , there are now institutional-level data sources available to retail traders .
One example is Volland at www . vol . land , which has a platform that stores all of the options trades made daily and uses AI tools to categorise them into dealerbought or dealer-sold , then applies pricing models to help determine dealer hedging requirements . Tools like this used to be available only to institutions , but any brokerage that provides this level of data and offers APIs for automated trading will gain customers and trading volume . Furthermore , the more successful a trader is , the better the retention for the brokerage – ultimately increasing its profits .
BROKERAGES HAVE DESIGNED APPS THAT GIVE THE LOOK AND FEEL OF A GAME RATHER THAN A SERIOUS INVESTMENT TOOL .
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