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The last few paragraphs contain the “so what?” Even so, it doesn’t really explain. It just says that HFTs exploit their retail customers. Does anyone know how?
by Hnrobert42 8y ago
The last few paragraphs contain the “so what?” Even so, it doesn’t really explain. It just says that HFTs exploit their retail customers. Does anyone know how?
Your comment implies maybe the benefit can be found in unfair bid ask prices. Are they doing something like:
1. Buy their own shares of xyz.
2. Execute your buy order. Which drives up the price per share fractionally.
3. Sell their shares of xyz.
This is total speculation. I have no expertise in this area.
- blondie9x 8y agoYes very similar. By knowing the orders Robin Hood sells to the HFT firms prior to execution they are better able to exploit the market bid and ask sizes and orders and Robin Hood customers could end up with worse fill prices
- tptacek 8y agoAnd that's different from all the other retail brokerages, which charge trading fees and route their orders to Citadel like everyone else does, how? Also, what kind of trading are you doing with Robinhood where you're sensitive to the theoretical 1-2 cents this supposed Citadel trade is taking out of your hide? Would you be happier if Robinhood just charged a 2 cent trading fee?