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What mechanism do they use to pass down these savings? I'm definitely not aware of anything like that.
by thebean11 6y ago
What mechanism do they use to pass down these savings? I'm definitely not aware of anything like that.
- lucisferre 6y agoI suggest you read the article then
- gamblor956 6y agoFor example: if you want to buy X for $100, but it's available for $98, then the traditional broker will buy it for $98. Robinhood, instead, will go with the $99.99 offer if that seller offers them more money. You were willing to pay $100, so from your point of view you weren't "harmed" either way, but with the traditional broker you saved $2/share, and with Robinhood all the savings went to them. Generally, brokers are either required to go with the best offer, or, if they don't, explain to customers that they don't and why. Robinhood violated that rule by marketing themselves and going with the best offers (but actually did the opposite) and that's what the SEC is fining them for.