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The bid-ask spread on most stocks is 0.01. You'd need to trade a LOT for this to actually make any real difference in your returns. Given that the average size
by ac29 6y ago
The bid-ask spread on most stocks is 0.01. You'd need to trade a LOT for this to actually make any real difference in your returns. Given that the average size of account at Robinhood is something like $5000, I dont think the average trader there is really getting fleeced by market makers.
The bid-ask spread on some of the questionable options Robinhood traders are transacting in is quite a bit higher, though.
- qeternity 6y agoYou fail to grasp the size of the equities market, as well as tangential trading opportunities. Also options market making against retail is absurdly profitable. There’s a reason Citadel is paying tens of millions of the privilege of executing these trades. Source: former head of quant trading for multi billion dollar hedge fund