Public trading app.
Public trading app.
Public says it's delivering better price execution for its customers without building a business model around payment for order flow.
The app, which has more than one million users, has published data showing that it is better than its competitors, like Robinhood, which makes money by making money by making money on customer trades.
The practice of market structure issues came into the spotlight during the GameStop saga that sparked this year's meme stock craze. More than 50,000 retail traders have signed a petition to push for a ban, and the Securities and Exchange Commission's chief Gary Gensler has said such a move is on the table.
According to the head of market structure research, if the practice were to continue, it would have an impact on the industry.
Public stopped using payment for order flow in February and now uses smart order routing software which routes orders to the best price after scanning dozens of exchanges and trading systems.
The data available to us strongly suggests that Public delivers better execution quality on average to customers than our peer firms that accept PFOF from market makers," Public said in a post.
Public beats out Robinhood, which has 18.9 million monthly active users, for the title of "effective spread over quoted spread." Public wrote that the measurement shows how much price improvement an order received and how much it correlated to better execution. Public's EFQ is 32%, while Robinhood's is 45%.
The most important metric for understanding the quality of prices delivered is Efq, according to Public.
The percent of shares executed at or better than the National Best Bid and Offer (NBBO) at the time of order is known as at-or- better.
Net price improvement is a metric that swung in favor of the company. Public saves an average of $1.18 per trade. The story was not comment on by Robinhood.
Business Insider has an original article.
