A high-frequency trading firm that executes crypto trades for Robinhood is getting into equities

• Jump Trading Group, a big but low-profile high-frequency trading firm, is making the leap into executing retail equity orders, according to a Wall Street Journal report.
• Executives at Jump told the WSJ that the company has been plotting its move to retail equity execution for years, and is now finalizing the regulatory approval to do so.
• Jump already executes some crypto orders for Robinhood, but the move into stocks thrusts the trader into the heart of the meme-stock phenomenon and the ongoing debate around payment for order flow.

Jump Trading Group, a big but relatively low-profile high-frequency trading firm, is making the leap into executing retail equity orders, a space long dominated by Citadel Securities and Virtu Financial, according to a Wall Street Journal report.

Executives at Jump told the WSJ that the company has been plotting its move to retail equity execution for years, and is now finalizing the regulatory approval to do so. One Jump executive, Tonya Adduci, said that the company felt compelled by the current market configuration to get in on retail equities.

"The utopian market structure for US equities would be a completely lit and transparent market," said Adduci. "Absent that, we're forced to find ways to participate in the markets as they exist today. That means we need to have a footprint in the wholesale market-making business."

Jump already executes some crypto orders for Robinhood, but the move into stocks thrusts the trader into the heart of the meme-stock phenomenon and the ongoing debate around payment for order flow, the practice where market makers like Citadel Securities and Virtu pay brokers like Robinhood for access to its retail clients' trades.

PFOF has attracted intense regulatory attention amid swirling allegations that the practice could lead to worse prices for retail customers. Industry players counter that the opposite is true: retail investors save billions a year thanks to superior execution from market makers.

Jump's business currently centers around trading in the crypto and Treasury markets, including paying $46 million in crypto PFOF to Robinhood in the first quarter of 2021, according to the Journal.