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This is a very tame reading of the mistake. Telling customers that their stock orders would be executed at prices matching other firms, when in fact Robinhood w
by aabhay 6y ago
This is a very tame reading of the mistake. Telling customers that their stock orders would be executed at prices matching other firms, when in fact Robinhood was executing those orders at inferior prices -- that's a big misrepresentation. You're paying extra for something while being told that you're not.
- baby 6y agoI don’t get it. If you sell stocks at the market price it wouldn’t be the market price but something cheaper that RB would buy and then sell at the real market price?
- wocram 6y agoRetail orders generally trade with against market makers off-exchange, between the quoted market price. If the quote is Buy @ $1.00 x Sell @ $1.01, a retail order would be able to buy at a price like $1.0099. That $.0001 savings is known as "price improvement". Separately, the market maker pays a negotiated ahead of time rate to Robinhood for sourcing the order, aka "payment for order flow".
- jellicle 6y agoNot Robinhood on the other end of the transaction, but yes. If you and someone else both mashed SELL at the exact same instant, they'd get $48 for their stock and you'd get $47.99 and your confirmation screens would both say "we sold your stock at the highest price we could find". In exchange for sending their customers to a place where they'd only get $47.99 instead of $48, Robinhood received direct cash payments.