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Yes, that's what happens, although "best buddy" is really "company that pays us the most for the orders." I am not sure if you meant it this way but "best budd
by mason55 7y ago
Yes, that's what happens, although "best buddy" is really "company that pays us the most for the orders."
I am not sure if you meant it this way but "best buddy" implies that something shady is going on. If you want to pay Robinhood more for their order flow than Virtu & Citadel I'm sure they would be happen to send you all the orders you could fill.
- im3w1l 7y agoIt's essentially using a sub-tick size price improvement (but paid to the broker to cover trading fees) to jump the queue at the market. It arguably undermines the existence of price ticks. I think you know this but for the lurkers, the purpose of price ticks is to make the market first-come-first-serve. Without them people can raise the bid by 0.0000000001 to get first in line, making the market last-come-first serve. But as far as shadiness goes, it's a very light shade of gray.