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As a retail customer that has done volatility trading I've used RH and other brokers that route through Citadel, because they gave better fills/commissions that

As a retail customer that has done volatility trading I've used RH and other brokers that route through Citadel, because they gave better fills/commissions that made my returns more profitable. The reason for this is that they can give tighter fills to small scale (and presumably dumb) retail investors. > and the Robinhood founders. Do you mean the Robinhood shareholders?

jjtheblunt 3y ago
Yep thank you
dpflan 3y ago
Interesting, I’m having trouble understanding how in Robinhood you are aware that you’re benefitting from the Citadel flow, how do you see/know you are getting better fills/commissions? I am not aware of how you would know Citadel is involved in your activities. Are you comparing the same trade on different platforms and see that RH is better? Could you provide an example (if you do not want to expose your trading strategies that is understandable)?
- deleted 3y ago
  [deleted]
- SamReidHughes 3y ago
  The active orders on some brokers tell you how they got routed (i.e. via "Citadel"). I did some testing, with similar trades. Some of the difference is just from the commissions structure -- if it's not a percentage of contract price, smaller priced contracts benefit from lower commissions. I was buying and selling long and short strangles and straddles or iron condors. Sometimes strangles with farther out contract legs, at prices like 0.40-0.80, would use Robinhood (simply because I had an account with them, and not every other broker), while nearer contract legs at higher prices on the same underlying would use Fidelity or IBKR. Generally I was entering and exiting, not holding to expiry, so I had 0.65x4+fees = 2.70 in commissions for a given contract pair on Fidelity. Nowadays it'd often be about 2.05 on Fidelity because they let you close contracts under .65 for free. I didn't think to negotiate commissions, but I was surely too much of a small fry for that.

jjtheblunt 3y ago

Yep thank you

dpflan 3y ago

Interesting, I’m having trouble understanding how in Robinhood you are aware that you’re benefitting from the Citadel flow, how do you see/know you are getting better fills/commissions? I am not aware of how you would know Citadel is involved in your activities. Are you comparing the same trade on different platforms and see that RH is better? Could you provide an example (if you do not want to expose your trading strategies that is understandable)?

deleted 3y ago
[deleted]
SamReidHughes 3y ago
The active orders on some brokers tell you how they got routed (i.e. via "Citadel"). I did some testing, with similar trades. Some of the difference is just from the commissions structure -- if it's not a percentage of contract price, smaller priced contracts benefit from lower commissions. I was buying and selling long and short strangles and straddles or iron condors. Sometimes strangles with farther out contract legs, at prices like 0.40-0.80, would use Robinhood (simply because I had an account with them, and not every other broker), while nearer contract legs at higher prices on the same underlying would use Fidelity or IBKR. Generally I was entering and exiting, not holding to expiry, so I had 0.65x4+fees = 2.70 in commissions for a given contract pair on Fidelity. Nowadays it'd often be about 2.05 on Fidelity because they let you close contracts under .65 for free. I didn't think to negotiate commissions, but I was surely too much of a small fry for that.