Good article. Good study. The Sharpe ratio comparisons are staggering. In the US, the market-makers are understandably opaque, and the barriers to entry for competitors significant.
In the US, a "price improvement" is calculated versus NBBO which is ludicrous. It does not include all order flow and excludes what the market-maker earns on the other side. It appears that retail investors do not lose so much or actually benefit which is ridiculous. Ken Griffin is rich for a reason.
These kinds of studies are far more revealing. Some good work also done by academics here on retail losses on options trading.
Over-trading is a quick route to poverty for retail traders.
Being poor is expensive.
Good article. Good study. The Sharpe ratio comparisons are staggering. In the US, the market-makers are understandably opaque, and the barriers to entry for competitors significant.
In the US, a "price improvement" is calculated versus NBBO which is ludicrous. It does not include all order flow and excludes what the market-maker earns on the other side. It appears that retail investors do not lose so much or actually benefit which is ridiculous. Ken Griffin is rich for a reason.
These kinds of studies are far more revealing. Some good work also done by academics here on retail losses on options trading.