How the trading ecosystem works

How the trading ecosystem works

Through this blog, we’ll be explaining the chain of events from the placement of an order to it being executed.

Stake is an introductory broker. We are the access point for customers in the regions we operate to US exchanges through a series of entities.

This is the same role that many brokerages around the world play. For example, the likes of Freetrade, Revolut, SelfWealth, Hatch, Square and so on.

One of these key entities we work with is the FINRA regulated broker-dealer in the US, named DriveWealth. DriveWealth acts as a B2B service provider to Stake and has no relationship beyond this.

To note, as DriveWealth is a member of SIPC, the assets in your account are insured up to the value of $500k USD. And, recent disruptions to the Stake platform have in no way impacted the security of your assets.

The chain of events in a trade

When customers sign up to Stake, an account is created with Stake with DriveWealth. As customers fund their accounts, Stake enables their funds to be sent to this DriveWealth account through FX remitter, OFX.

As the funds land in this DriveWealth account, customers have full visibility, access and control over them through Stake.

When an order is placed on the Stake platform, this order is instantaneously sent to DriveWealth. DriveWealth receives this order and passes it onto an entity named Cuttone & Co. Cuttone & Co are an execution broker who are plugged in to the exchanges themselves. Cuttone & Co actually put the order to market and have it executed in accordance with the National Best Bid Offer (NBBO) regulations.

When this order is filled on the market, Cuttone & Co informs DriveWealth of this, who reflects this in that customer’s account. As such, the customer is able to see this reflected in their Stake account.

As such, Stake does not control policies around trade execution and has no control over orders that may be cancelled. Stake is the access point, enabling people outside the US to step into the US market.

Some other entities involved

In addition to DriveWealth, we work with a few other entities to enable the Stake experience.

• OFX is the FX remitter that we use to transfer funds from a customer’s local currency into USD
• Tiingo is the entity we use to reflect market data
• Benzinga is the entity we use to reflect analyst ratings, price targets and full company financial data

Where issues have arisen this week

Being stuck on the ‘White Screen’

Each time a customer logs into their Stake account, each and every data point on each and every page they see is there as a result of Stake making a data request to one of the above entities.

Consider your dashboard. Portfolio value, buying power, profit/loss, price of securities you hold, the gain/loss of these holdings for the day, the gain/loss of these holdings for all-time, just to name a few.

With the huge amount of people we’ve had on Stake in the past week, the amount of data requests that have been getting made to these providers has put strain on the infrastructure and slowed the responsiveness for all users.

Market Orders Pending

We have seen from a few customers that market orders placed have been stuck in ‘Pending Orders’. These orders have actually been filled. They are showing as pending because with such huge volumes, the notification of execution from Cuttone & Co to DriveWealth has been slow. As such, DriveWealth passing on this notification (and the customer then being able to see this) has been slow. So occasionally, orders are showing as ‘pending’ even though they have been filled.

Trade Cancellations

While many customers have successfully been trading through Stake, some customers have had orders cancelled. Order cancellation is not unique to the past week, it is as a result of policies set by either DriveWealth or the exchanges themselves.

Please read a little more as to why some orders have been cancelled here.

We hope this information has been helpful.