> If it was simple matter of profiting off bid-ask spread: Force those orders through the exchanges instead of through dark pools. When the broker gives the or

> If it was simple matter of profiting off bid-ask spread: Force those orders through the exchanges instead of through dark pools. When the broker gives the order to a market maker directly, they can't offer a worse price than the exchanges (national best bid offer). Typically, they offer a better price (=price improvement, a "discount"). Robinhood takes a cut of that discount (and a larger cut than other brokers). The other poster explained why the market maker gives a discount on "uninformed" retail flow compared to the NBBO. I agree that HFT is just a silly game of being faster, and is largely rent seeking and even destroying value. But market making per se is valuable, and pretty competitive, and the spread constitutes the necessary and benign payment for that service. Here's a suggestion: 1. Restrict trading to, say, 4 hours a day, 2 in the morning, 2 in the evening. You could maybe make it such that time zones have partial overlap. 2. During these hours, have an auction every minute, instead of continuous trading. Maybe with stochastic end time (to negate HFT techniques/sniping). 3. Impose a Tobin tax of, dunno, 1 basis point on every trade. Measures such as those might limit the opportunity for profit from silly HFT (like replacing the cable from Chicago to NY by a slightly straighter cable to shave off a few milliseconds).