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...mark up the prices their customers are paying for securities. Are you suggesting the customer's orders will not be filled at the NBBO? Or something else? Ca
by yummyfajitas 12y ago
...mark up the prices their customers are paying for securities.
Are you suggesting the customer's orders will not be filled at the NBBO? Or something else? Can you state explicitly (i.e., describe the timeline) of what you think is happening?
- falsestprophet 12y agoThere is a quantifiable value to retail order flow [1], which is realized either by selling the order flow or internalizing trades (or by other means unfamiliar to me). ...mark up the prices their customers are paying for securities. It would have been much more accurate to say that the broker is benefiting from part of the spread. Of course, one expects a service provider to benefit from providing a service. This is also true of exchanging currencies and everything else in the capitalist circle of life -- so it was very possibly not a useful comment. [1] What is the opposite of adverse selection? Advantageous selection?
- yummyfajitas 12y agoThe broker is benefiting - in the case of Robinhood he is sharing that benefit with the customer. The customer will get the exact same price as if his order went to the public exchanges. The only difference is that instead of selling to anonymous person on BATS, he'll sell to anonymous HFT on the broker's internal dark pool.