Jump Trading Group Plans To Execute Retail Equity Orders

Jump Trading Group, one of the world’s biggest proprietary trading firms, has declared to start a unit for the execution of individual investor stock orders, a business that has proved immensely profitable for electronic traders after the meme-stock mania ignited an outbreak in U.S. retail volumes.

According to the Wall Street Journal report, Executives at Jump are planning to set up a ‘retail wholesaler business’. The wholesalers will be responsible for buying and selling orders for the customers of online brokerage firms such as Charles Schwab’s, TD Ameritrade and Robinhood Markets Inc.

The Chicago-based High-Frequency Trading Group is a massive name in the global markets. The firm is active on futures, options and stock exchanges around the world and is a major trader of Treasuries and cryptocurrencies. As revealed by the firm, there has been plans to execute retail equity orders for a very long time, way before meme-stock mania, and now it has finally declared to launch a specific unit to accomplish this. However, they are still in the process of seeking approval from regulators, and have not mentioned the exact launch time.

Tonya Adduci, an executive at Jump, indicated that the company was compelled by the current market configuration to enter into executing retail equities.

Jump’s Big Move Into The Equity Market

Jump has already executed crypto orders for Robinhood, but the move into equities will push it further into the heart of the meme-stock phenomenon. Notably, Wholesalers like Virtu Finance or Citadel Securities trade millions and billions of shares each day.

They make money from acquiring a small spread between the buying and selling price of stocks, often just a penny or less than that per share. After getting the regulatory approval, Jump will also join this group of elite traders.

Experts speculate that the company’s move arrives at a time when the securities market structure, and especially payment for order flow processes, is attracting scrutiny from regulators. In June, SEC Chief Gary Gensler instructed his staff to re-review stock market structure regulations.

Apart from this, the SEC boss, Gary Gensler is also looking forward to fully legislating the crypto marketplace in full force. Very recently he called the crypto space ‘full of frauds’ and urged Congress to grant the SEC additional powers in order to cultivate ‘comprehensive and coordinated’ anatomy that would address risks while protecting the investors.

Strict regulations are being formulated by the authorities to regulate the fast-growing world of cryptocurrency, digital assets and equity and their overall impact will have a rub off on emerging players.