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Its market makers generally rather than HFT. Essentially they (market makers) agree to buy stock that you want to sell than they sell it to someone else. Proble
by benj111 7y ago
Its market makers generally rather than HFT. Essentially they (market makers) agree to buy stock that you want to sell than they sell it to someone else. Problem is if the market moves against them, you could be a hedge fund manager that knows something they don't.
Robin hood customers don't really know anything, their trading is fairly random, so a market maker can be confident that if they buy the shares, the Robin hood customer doesn't know something they don't, that is worth something to them, and allows them to offer tighter spreads.