4 ms·

The other commenters answered your first question about the sale of flow to HFT firms. Regarding your second question, I wouldn't recommend trading a lot of si

The other commenters answered your first question about the sale of flow to HFT firms. Regarding your second question, I wouldn't recommend trading a lot of size on Robinhood, or using market order in general, but brokerages that charge commissions do not necessarily offer better execution than Robinhood, many of them still route your flow to an HFT firm or have less than stellar order routing systems.

adrr 7y ago
Execution price is governed by SEC and clients must get the best price. HFT doesn’t really work on retail investors who’s sells and buys can be covered with one order. You can’t front run one order trades. Institutional investors are the prey for most HFTs since they do large stock trades and they need to hide to prevent front running.
- moose314 7y ago
  The top of book liquidity on most equity stocks is light enough that a single retail investor can absolutely submit orders which must hit multiple exchanges, especially if they do so at non-peak hours. The NBBO doesn't help you if every market maker retreats before your broker can hit the next exchange. There was a post on Reddit just a month ago where a small investment club did just that. https://imgur.com/gallery/qMBAzoQ https://imgur.com/gallery/qMBAzoQ
  - notyourday 7y ago
    This is not 1994. Catching a market order with volume is winning a Power Ball. It will be a limit and if it is not IOC/FOK order, should it clear top of the book and not be filled it would simply become a new national best.
    - moose314 7y ago
      Its not really clear who you are arguing against, the GP mentioned large market orders, I simply made the point that most brokers have worse order routing than the HFT firms and Robinhood is probably not much worse than anything else out there. Using limit IOC orders is a tool that more savvy retail traders can use to prevent bad execution, but if they are trading size the commission they pay to the broker won't make much of a difference. I would also point out that having your IOC order not fully filled is also bad execution. If you want to get a certain size done, repeatedly IOCing the market with manual click trades is not ideal.
      - notyourday 7y ago
        GP is confused. The market orders from retail investors are measured in hundreds to thousand share, mostly 100s rather than 1000, with 100x100 or 200x200 being a typical live quote on a 1000x1000 As soon as the retail investor starts throwing more than 1k orders they become limits. All the talk about RH being a bogey man with it selling order flow is b.s. peddled by those who either suck the teat of the retail investors directly or those that live off the spoils from those that such those teats. Wall St is terrified that tech is coming to eat its margins -- that's why we get all this. P.S. I'm not a fan of RH at all - 99% of the people who use it should buy an ETF with a 0.01-0.03% expense ratio and be done but if a random college jock that does not have a PhD in math can make $200k/year first year out of college in a Wall St firm, Wall St needs to get a haircut.

adrr 7y ago

Execution price is governed by SEC and clients must get the best price. HFT doesn’t really work on retail investors who’s sells and buys can be covered with one order. You can’t front run one order trades. Institutional investors are the prey for most HFTs since they do large stock trades and they need to hide to prevent front running.

moose314 7y ago
The top of book liquidity on most equity stocks is light enough that a single retail investor can absolutely submit orders which must hit multiple exchanges, especially if they do so at non-peak hours. The NBBO doesn't help you if every market maker retreats before your broker can hit the next exchange. There was a post on Reddit just a month ago where a small investment club did just that. https://imgur.com/gallery/qMBAzoQ https://imgur.com/gallery/qMBAzoQ
- notyourday 7y ago
  This is not 1994. Catching a market order with volume is winning a Power Ball. It will be a limit and if it is not IOC/FOK order, should it clear top of the book and not be filled it would simply become a new national best.
  - moose314 7y ago
    Its not really clear who you are arguing against, the GP mentioned large market orders, I simply made the point that most brokers have worse order routing than the HFT firms and Robinhood is probably not much worse than anything else out there. Using limit IOC orders is a tool that more savvy retail traders can use to prevent bad execution, but if they are trading size the commission they pay to the broker won't make much of a difference. I would also point out that having your IOC order not fully filled is also bad execution. If you want to get a certain size done, repeatedly IOCing the market with manual click trades is not ideal.
    - notyourday 7y ago
      GP is confused. The market orders from retail investors are measured in hundreds to thousand share, mostly 100s rather than 1000, with 100x100 or 200x200 being a typical live quote on a 1000x1000 As soon as the retail investor starts throwing more than 1k orders they become limits. All the talk about RH being a bogey man with it selling order flow is b.s. peddled by those who either suck the teat of the retail investors directly or those that live off the spoils from those that such those teats. Wall St is terrified that tech is coming to eat its margins -- that's why we get all this. P.S. I'm not a fan of RH at all - 99% of the people who use it should buy an ETF with a 0.01-0.03% expense ratio and be done but if a random college jock that does not have a PhD in math can make $200k/year first year out of college in a Wall St firm, Wall St needs to get a haircut.