Crypto Exchange FTX Launches Stock Trading for US Clients

The popular cryptocurrency exchange FTX is expanding into the traditional investment space for US retail clients.

In a new message, FTX US President Brett Harrison announce to its 50,900 Twitter followers about the platform’s new feature, which allows users in all 50 US states as well as Puerto Rico and the Virgin Islands to buy and sell stocks and exchange-traded funds ( OG F ).

“FTX Stocks is now available for US users!

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Residents of all 50 states (yes, including NY!) as well as PR and USVI are eligible to participate.

Trade hundreds of stocks and ETFs both online and on the FTX US Pro mobile app.

Harrison then answered several questions, first specifies that the proposed actions were real and not synthetic, even before clarifies that customers using the standard FTX app can expect to see the new working trading functionality in “a few days”.

The entrepreneur also appeared on CNBC to explain FTX’s rationale for 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 try to use a model that does not rely on order flow payment. Certainly a controversial practice that has resulted in the movement of much retail liquidity from public exchanges to private wholesalers.

We believe that this ultimately results in a deterioration of market quality for all participants over time, and we are trying to reverse this trend as much as possible. »

Payment for Order Flow (PFOF) allows brokers to make money while offering commission-free trades by viewing retail client orders at private market makers instead of a public exchange. Fractional profits are earned on the price differences between a customer’s original offer and the actual sale price of the stock.

When asked for comment, FTX intended to make money from stock trades, Harrison explains,

“Right now it’s free for all users. From one month it should be free for all purchases in one action. One thing we learned from our private data is a surprising amount of power results from fractional share purchases that are [less than] part. High priced stocks like Tesla.

From there, we make a commission on each trade, which kind of goes back to the way 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 from the stock market .

Harrison says the base fee structure will be 5 basis points, or 5/100ths of a percent, plus 2 basis points in “reasonable amount” transactions.

The CEO reveals himself by explaining how cryptocurrency buyers expect simple commission rates in their transactions and are therefore likely to adopt FTX’s model.

“Our users, especially on the crypto side, are used to this simple, honest and fair idea of ​​producing a fixed percentage of the transaction’s nominal value on each transaction instead of having to wonder if the payment flow for the order degrades the quality of NBBO [National Best Bid and Offer].

People get really honest prices.

In May, it was reported that FTX had approached at least three stock trading startups regarding a possible acquisition.

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Featured image: Shutterstock/Alisa9

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