Duke Professor Fletcher on GameStop, Payment for Order Flow

The video discusses the concept of payment for order flow, highlighting its impact on retail investors and platforms like Robin Hood. It examines Robin Hood's business model, including the use of margin accounts and the potential regulatory concerns. The video also delves into the GameStop controversy, focusing on Keith Gill's role and liability. Finally, it explores the broader implications of market events, discussing who might be to blame and the potential for new regulations.

What is a potential downside of payment for order flow for retail investors?

• It eliminates all trading fees.

• It guarantees the best market price.

• It may hide the true cost of trades.

• It provides direct access to market makers.

How does Robin Hood's payment for order flow model potentially affect trade execution?

• It offers exclusive access to certain stocks.

• It guarantees zero commission trades.

• It may not provide the best available market price.

• It ensures the fastest execution time.

What concern is raised about Robin Hood's default account settings?

• They prevent access to market data.

• They require a high minimum balance.

• They automatically enroll traders in margin accounts.

• They limit trading to specific stocks.

What is a key concern about retail investors' access to complex financial products?

• They receive personalized financial advice.

• They are restricted to only a few financial instruments.

• They may not understand the complexities and risks involved.

• They have unlimited access to all financial markets.

What was Keith Gill's role in the GameStop situation?

• He spread false information about GameStop.

• He was a hedge fund manager.

• He shared his opinion on GameStop's future.

• He was a regulatory official.

What is a challenge in assigning blame for the GameStop stock surge?

• Understanding the role of social media.

• Determining the legality of short selling.

• All of the above.

• Identifying the exact trades involved.

What is a potential outcome of the SEC's investigation into the market activities?

• Immediate changes to trading platforms.

• New regulations to prevent similar events.

• A ban on all retail trading.

• Increased trading fees for all investors.