Thu, 08/13/2020 – 13:50
In that piece, we joked: “Like its order flow, we’re guessing ‘everything’s for sale’ at Robinhood and wouldn’t be surprised if the brokerage creates a hedge fund ‘product’ with this data moving forward.”
Now it seems that if Point72’s Steve Cohen has his way, that is exactly what could happen. Business Insider reported on Wednesday that Cohen has reached out to other trading platforms and investing apps in an attempt to find similar tracking data his firm can use to detect “new trading signals”.
It’s easy to conclude that, in addition to selling order flow, brokerages may soon be selling this type of data to all hedge funds that are desperate to be the next Citadel by front-running retail in any way they can.
Cohen’s firm reached out to other platforms “just hours” after Robinhood restricted access to its API, the report notes. Additionally, the owner of Robintrack.net, the website that aggregated the data from Robinhood, told Business Insider he had “seen evidence that Point72 and quant hedge fund D.E. Shaw” were trying to scrape the site’s data.
The report also notes that Cohen’s fund is not the only one who has reached out to other platforms over the last 48 hours.
For years, the website RobinTrack.net had been doing a great job of mining RobinHood’s data to provide raw data and a visualization of which stocks the users of the retail brokerage have been holding and disposing of on a daily basis.
But last Friday, CNBC reported that the brokerage will no longer display how many of its users hold a certain stock. In addition, it is going to be taking down its public API data that allows other sites to source its data for visualization and analysis purposes.
“The data has been used to show booms in retail stocks,” a CNBC report said last Friday. “You guys know RobinTrack well. A lot of financial news outlets use it for reporting, including CNBC.”
Robinhood said in a statement that even thought it is restricting third party access to its API data, it still has “many other tools” that its users can offer.
“Trends and data are often misconstrued and misunderstood,” Robinhood said. “The majority of its users” are buy and hold users, not daytraders, the brokerage said.
Yeah, right. Aside from the PR spin of trying to position itself as a serious brokerage and not a casino app for unemployed daytraders, we’re guessing there is another angle to Robinhood removing this data: if you want it in the future, you’re going to have to pay.
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Author: Tyler Durden