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(1) Kinda irrelevant to the point, I feel, and Robinhood's design is (imo) clearly targeting the gambling crowd. (2) Slightly better argument, but retail order
by scaredginger 4y ago
(1) Kinda irrelevant to the point, I feel, and Robinhood's design is (imo) clearly targeting the gambling crowd.
(2) Slightly better argument, but retail orders don't have much effect on the market overall.
- PaulHoule 4y agoSome of the reason why market makers will pay for order flow from Robinhood is that they don't believe retail orders will move the market because retail investors don't have any useful information about the stock. On the other hand, market makers don't want to trade against, say, Elon Musk buying or selling Tesla because they assume that kind of person knows something and they try to make them pay through the nose for liquidity. That is why people like that might announce well ahead of time the schedule that they plan to sell stock to diversify or raise funds and why there is a special sector of the industry to help move large blocks of stock, convincing buyers that they are not being exploited.