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Which means that your cost is market maker's spreads instead of fees. Still a cost to you.
by graemep 2y ago
Which means that your cost is market maker's spreads instead of fees. Still a cost to you.
- kortilla 2y agoNope, this is one of the counterintuitive things about people paying RH for order flow. Market makers can offer tighter spreads when they know it’s a pool of dumb money.
- graemep 2y agotighter spreads are not zero spreads
- kortilla 2y agoWhat’s your point? The spreads are tighter than you would get on the open market. NBBO requires that if there is something better that Robinhood gives it to you.
- eru 2y agoI think the point is that if you trade, you pay the spreads. Market makers can help you pay narrower spreads, but you still pay them. If you just hold your index fund, you don't pay these recurring spreads.