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Robinhood shares traded at $10.92 at Thursday’s open. The stock jumped following news that the SEC is set to allow Wall Street firms to continue to make payment-for-order-flow deals.

Robinhood shares soared at the open on Thursday following news that the U.S. Securities and Exchange Commission (SEC) won’t limit it in making payment-for-order-flow (PFOF) deals.

The shares in the retail investing platform were up 9.3% Thursday. They traded at $10.92 on Thursday open, an increase of $9.92 at Wednesday’s close.

SEC will not Robinhood from limit PFOF deals

The stock rose sharply following a report from Bloomberg saying the SEC won’t limit Wall Street firm’s making payment-for-order-flow deals, a major part of firms such as Robinhood and Charles Schwab’s business models. Robinhood can offer commission-free trading through this system.

Virtu Financial shares, which executes trades for Robinhood, rose almost 8% to the open.

The system is criticized for routing orders through large electronic trading firms that pay the broker and not offering retail traders the best prices. Robinhood previously settled with SEC for $65million over its failures to disclose PFOF activity and failing to “satisfy its duty to seek best reasonably available terms to implement customer orders.”

Gary Gensler, chair of the SEC, had suggested an auction system to replace PFOF. In an effort to increase competition, and to ensure that retail traders receive a better price, this would allow trading firms to compete to fill similar orders to the options market.

The post Trading Platform Robinhood Shares Rally 9% on SEC News first appeared on The Daily Encrypt.



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Angie Byrd