Courtesy of Pam Martens
Sal Arnuk, Partner and Co-Founder, Themis Trading
Sal Arnuk co-founded Themis Trading in 2002 with Joe Saluzzi. In 2012 they wrote the book Broken Markets: How High Frequency Trading and Predatory Practices on Wall Street Are Destroying Investor Confidence and Your Portfolio. The rigging of Wall Street has only grown worse since that time.
Having a professional trader such as Arnuk provide an insider’s analysis of how Robinhood, which accepts retail stock orders and then sells the majority of them to high frequency trader, Citadel, in exchange for payment-for-order flow (PFOF), is just who Congress needs to hear from.
Arnuk, according to his written testimony, will tell the House Financial Services Committee the following at a hearing scheduled for today:
“Robinhood does something very novel; they combine investing/trading tools with a social media experience targeted to young people – complete with trading addiction, and a herding effect. They have amassed a user base whose orders tend to be small; for example, Robinhood’s average account size is about $5000, compared with TD Ameritrade’s $110,000.
“As such, they have created a unique product –small emotion-driven orders that tend to be predictable, which they can then sell to their real customers – HFT [High Frequency Trading] market making firms, at a premium. If you think this claim is bombastic, consider that:
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