>That, regrettably, is what it discovered. The SEC’s investigation revealed the secret behind Robinhood’s high order-flow revenues: The company charged principa

>That, regrettably, is what it discovered. The SEC’s investigation revealed the secret behind Robinhood’s high order-flow revenues: The company charged principal trading firms much more than the going rate. Typically, the SEC found, payments for order flow equal about 20% of the average price improvement that investors realize on their trades. But Robinhood insisted on receiving what amounted to 80% of the improvement: 4 times the customary level. >When Robinhood made that demand, the principal trading firms with which it was negotiating informed the company that something had to give. If Robinhood were to take that much of the proceeds for itself, then “there would be less money available for the principal trading firms to provide price improvement for Robinhood’s customers.” In other words, Robinhood explicitly was informed that more for it meant less for its customers. The company accepted those terms. There's a missing logical step here: if 80% fees mean there is less money available, so will 20% fees. So is it just that payment for order flow is inherently bad for the customer, and RH are the worst of a bad bunch?