Moomoo AMC not routed to HF through PFOF model
$AMC Entertainment (AMC.US)$
Note: This is for Moomoo SG users, do check with your regional representtives for confirmation in any variance.
Note2: Be sure to save this comment, and share it when someone else asks again. URL: https://www.moomoo.com/en-sg/community/feed/106567337967622
Hellooo apes! I have finally gotten enough information to at least say that I have confidence in AMC stocks bought on Moomoo platform not being through Payment-For-Order-Flow model and none of our positions are synthetic, if anyone is still wondering. I'm not here to protect any organisation, one should do their own DD to verify any points below whenever possible.
Before you read on, please take a quick look at link below to understand what Brokerage, Exchanges, Market Maker, custodian are, as I will be using these terms to explain.
https://gendal.me/2014/01/05/a-simple-explanation-of-how-shares-move-around-the-securities-settlement-system/
Few days back I decided to look into the way orders are processed on moomoo as the ape community is starting to boycott brokers that work with Payment-For-Order-Flow (PFOF) model. PFOF can play a part in price manipulated by Market Makers and here is a read on how PFOF of Robinhood is hurting apes:
https://redd.it/ohkr79
Robinhood is not the only broker that is using PFOF model. Some broker have PFOF offered to free-to-use customers, while some broker only have PFOF for options, etc. There is a gray area. That is probably why IBKR Pro is set to YES instead of NO, as they provide IBKR Pro users the "recommendation to use IBKR SmartRouting system.". See below.
Refer to my previous comment, I quote for Interactive Brokers disclosure for Order Routing updated 6/7/2021 :
https://gdcdyn.interactivebrokers.com/Universal/servlet/Registration_v2.formSampleView?formdb=3074
Referring to InteractiveBrokers LITE/PRO user, I quote:
Note: This is for Moomoo SG users, do check with your regional representtives for confirmation in any variance.
Note2: Be sure to save this comment, and share it when someone else asks again. URL: https://www.moomoo.com/en-sg/community/feed/106567337967622
Hellooo apes! I have finally gotten enough information to at least say that I have confidence in AMC stocks bought on Moomoo platform not being through Payment-For-Order-Flow model and none of our positions are synthetic, if anyone is still wondering. I'm not here to protect any organisation, one should do their own DD to verify any points below whenever possible.
Before you read on, please take a quick look at link below to understand what Brokerage, Exchanges, Market Maker, custodian are, as I will be using these terms to explain.
https://gendal.me/2014/01/05/a-simple-explanation-of-how-shares-move-around-the-securities-settlement-system/
Few days back I decided to look into the way orders are processed on moomoo as the ape community is starting to boycott brokers that work with Payment-For-Order-Flow (PFOF) model. PFOF can play a part in price manipulated by Market Makers and here is a read on how PFOF of Robinhood is hurting apes:
https://redd.it/ohkr79
Robinhood is not the only broker that is using PFOF model. Some broker have PFOF offered to free-to-use customers, while some broker only have PFOF for options, etc. There is a gray area. That is probably why IBKR Pro is set to YES instead of NO, as they provide IBKR Pro users the "recommendation to use IBKR SmartRouting system.". See below.
Refer to my previous comment, I quote for Interactive Brokers disclosure for Order Routing updated 6/7/2021 :
https://gdcdyn.interactivebrokers.com/Universal/servlet/Registration_v2.formSampleView?formdb=3074
Referring to InteractiveBrokers LITE/PRO user, I quote:
"For some products, IBKR-PRO clients may directly route their orders to a particular market of their choice, although IBKR recommends that our clients to use the IBKR SmartRouting system."
"IBKR-LITE orders for NMS stocks are generally routed to select over-the-counter market-makers ("Market Makers") for handling" << More on this later.
I looked into Interactive Brokers because (at least) for moomoo SG, orders are upstream to Interactive Brokers. Once again, check with your region representative to confirm your regional upstream (if any involved).
I then approached Interactive Brokers (who did not disclose any information to me as I was not a direct account owner on Interactive Brokers).
I was then told to approach AMC IR to check directly. I did this morning, yet to get response, but keep this link, it may be useful to share owners in our next phase.
https://investor.amctheatres.com/corporate-overview/default.aspx
While waiting for their response, responsible me went on digging on publicly available information. I landed on this page:
https://fastsupport.fututrade.com/en-us/topic123?lang=en-us
In the above link,13.4 Payment for Order Flowstates:
"You or the Clearing Broker may receive payments from markets for directing orders to them. The source and amount of these payments are available upon written request."
I then approach FUTU US and FUTU SG separately to request for PFOF statement to find out more about the source and payement records. I took the chance to verify another confusion going around. Here is what I can confirm, the accounts we moomoo SG users, have nothing to do with FUTU US, nor any of their bank protection. I have received this information from FUTU US, stating that FUTU US team did not find any assets flow on my US account. They are aware that I own FUTU SG account and got me to approach FUTU SG if need be:
I looked into Interactive Brokers because (at least) for moomoo SG, orders are upstream to Interactive Brokers. Once again, check with your region representative to confirm your regional upstream (if any involved).
I then approached Interactive Brokers (who did not disclose any information to me as I was not a direct account owner on Interactive Brokers).
I was then told to approach AMC IR to check directly. I did this morning, yet to get response, but keep this link, it may be useful to share owners in our next phase.
https://investor.amctheatres.com/corporate-overview/default.aspx
While waiting for their response, responsible me went on digging on publicly available information. I landed on this page:
https://fastsupport.fututrade.com/en-us/topic123?lang=en-us
In the above link,13.4 Payment for Order Flowstates:
"You or the Clearing Broker may receive payments from markets for directing orders to them. The source and amount of these payments are available upon written request."
I then approach FUTU US and FUTU SG separately to request for PFOF statement to find out more about the source and payement records. I took the chance to verify another confusion going around. Here is what I can confirm, the accounts we moomoo SG users, have nothing to do with FUTU US, nor any of their bank protection. I have received this information from FUTU US, stating that FUTU US team did not find any assets flow on my US account. They are aware that I own FUTU SG account and got me to approach FUTU SG if need be:
Hence this confirms that by default Moomoo SG users are using FUTU SG account, backed by our MAS and licensed (License No. CMS101000). U.S. Securities in your SG account are protected up to $500,000 by Securities Investor Protection Corporation (SIPC). We need not worry of the policy for FUTU US accounts. I created a new account on FUTU US to verify that accounts are not linked, and now my Moomoo App has both FUTU US and FUTU SG Accounts accessible.
While I was waiting for FUTU SG response with my further inquiry regarding Broker and Market Maker, I went back to check with Moomoo customer support, what Exchange are we using.
Below are the Exchanges we are using, and I was told by Moomoo customer support that the exchanges are by random, not by our choice. I have no way to verify this yet, to check if AMC stocks bought / sold on moomoo are done across various exchanges, or specific exchange. We will come back to this later.
Below are the Exchanges we are using, and I was told by Moomoo customer support that the exchanges are by random, not by our choice. I have no way to verify this yet, to check if AMC stocks bought / sold on moomoo are done across various exchanges, or specific exchange. We will come back to this later.
So today I exchanged handful of emails with FUTU SG staffs, below are some of their responses, for your reference:
In the above mail response, I was told that there are no 3rd party market making. Market maker for example Citadel, which I questioned about. The staff indicated that the shares I own under my FUTU SG account were purchased from the exchange, and they do not offer synthetic position.
I then wondered, wait a minute, what about previously mentioned orders being upstreamed to Interactive Brokers? How does that fit into the picture? I then question further. Below was the response:
I then wondered, wait a minute, what about previously mentioned orders being upstreamed to Interactive Brokers? How does that fit into the picture? I then question further. Below was the response:
Crash course >>> What is Clearer and what does it do:
https://www.investopedia.com/terms/c/clearing.asp#how-clearing-works
So in the above mail response, we can be certain, that Interactive Brokers indeed is in the picture, but they only act as our clearer. What is important here, is that the agreement between FUTU SG and Interactive Brokers is "Straight through process". This means that we are not dealing with any Market Maker. Moomoo (Futu) > IB > US exchanges. Refer to paragraphs above for the list of Exchanges we are using. Hence the list of exchanges listed could be the exchanges assigned by Interactive Brokers to Moomoo(Futu) in their agreement. (This, I am still confirming).
So in the above mail response, we can be certain, that Interactive Brokers indeed is in the picture, but they only act as our clearer. What is important here, is that the agreement between FUTU SG and Interactive Brokers is "Straight through process". This means that we are not dealing with any Market Maker. Moomoo (Futu) > IB > US exchanges. Refer to paragraphs above for the list of Exchanges we are using. Hence the list of exchanges listed could be the exchanges assigned by Interactive Brokers to Moomoo(Futu) in their agreement. (This, I am still confirming).
Conclusion (Based on my own finding and you should verfiy):
-AMC stocks bought on Moomoo SG (Verify your region) are not routed to Citadel or other HF
-AMC stocks bought on Moomoo SG (Verify your region) are not synthetic shares
-Account on Moomoo SG (Verify your region) are protected up to $500,000 by Securities Investor Protection Corporation (SIPC)
-Futu SG is a broker-dealer and custodian licensed by the Monetary Authority of Singapore, (License No. CMS101000).
-Buy and Hodl (Not Financial Advice)
-Share this comment to whomever ask whether Moomoo stocks being PFOF.
CherryPudding, sliding out
-AMC stocks bought on Moomoo SG (Verify your region) are not synthetic shares
-Account on Moomoo SG (Verify your region) are protected up to $500,000 by Securities Investor Protection Corporation (SIPC)
-Futu SG is a broker-dealer and custodian licensed by the Monetary Authority of Singapore, (License No. CMS101000).
-Buy and Hodl (Not Financial Advice)
-Share this comment to whomever ask whether Moomoo stocks being PFOF.
CherryPudding, sliding out
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Wannabemillionaire : WOW! Thank you so much CherryPudding! You are indeed a cherry in the pudding!
CherryPudding OP Wannabemillionaire : Hope it helps! haha
Wannabemillionaire : sure did.
Wannabemillionaire : To the moon and beyond! Just wondering I'm pretty new here. What happens if HF files for chapter 11? What will happen to our stocks?
CherryPudding OP Wannabemillionaire : The HF are insured by trillions of funds, in the scenario whereby the HF unable to cover (which is unlikely in the first place), they will be bailed out. There is no way they can't pay the price in the market. If need by, the government will intercept to bail them out to protect the economy. Any way, the apes bought the legitimate stocks and would be paid the price set in the free market. We are just closing their loop holes one after another till they no longer able to cheat the system.
Wannabemillionaire : I should change the name of how I should address you now. Thank you for the enlightenment Master CP!
phillyphan278 : interactive brokers whom futu sends orders to does pfof
phillyphan278 : i talked to customer service today, link to what they sent https://fastsupport.fututrade.com/en-us/topic132?lang=en-us click n read.
CherryPudding OP phillyphan278 : Did you read my post? I covered that point in my post.
phillyphan278 : Yes, i did. Still feel the same. People use your own brains
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