The popular FTX cryptocurrency exchange is expanding into the traditional investment space for retail clients in the United States.
In a new message, US FTX President Brett Harrison informed its 50,900 Twitter followers on the platform’s new feature that allows users from all 50 states of the United States, as well as Puerto Rico and the Virgin Islands, to buy and sell stock and exchange-traded funds (AND F).
“FTX Stocks Are Now Available For US Users!
Residents of all 50 states (yes, including New York!), As well as PR and USVI can join.
Trade hundreds of stocks and ETFs both on the web and on the FTX US Pro mobile app.
Harrison then answered several questions first specifying that the proposed actions were real and not synthetic, even before to clarify that customers using the standard FTX app can expect to see the new trading functionality working in “a few days”.
The entrepreneur also appeared on CNBC to explain FTX’s reasoning behind offering traditional financial products at a time when many traditional institutions are gearing up for cryptocurrencies.
Harrison says of FTX’s approach to commissions,
“The biggest difference for us is that we are trying to use a model that is not based on order flow payment. Clearly a controversial practice that has led to the shift of a lot of retail liquidity from public exchanges to private wholesalers.
We believe this ultimately results in a deterioration in the quality of the market for all participants over time and we try to reverse this trend as much as possible. “
Payment for Order Flow (PFOF) allows brokers to earn money by offering commission-free trades by sending retail client orders to private market makers rather than a public exchange. Fractional profits are made on the price differences between a client’s initial offer and the actual selling price of the stock.
When asked how FTX intended to make money from stock trading, Harrison explains,
“Right now it’s free for all users. For one month, it will continue to be free for all purchases in one action. One thing we have learned from our private data is a surprising amount of streaming results from fractional stock purchases, those that are [less than] apart from. High-priced stocks like Tesla.
From there, we’ll charge a commission on each trade, which somehow goes back to when things were. We believe this will result in much more transparent, fair and honest pricing as we continue to route these orders to public exchanges, rather than having to rely on private dealers or individual wholesalers where unregistered ETFs are filled by the stock market.
Harrison says the base commission structure will be 5 basis points, or 5/100 percent, plus 2 basis points in “fair amount” transactions.
The CEO concludes by explaining how cryptocurrency buyers expect simple fees in their transactions and therefore are likely to adopt the FTX model.
“Our users, especially on the crypto side, are used to this simple, honest and fair idea of charging a fixed percentage of the notional value of the transaction on each transaction rather than having to wonder if the payment flow to the order deteriorates the quality of the transaction. ‘NBBO [National Best Bid and Offer].
People really get fair prices.
In May, it was reported that FTX had reached out to at least three equity trading startups about a possible acquisition.
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