"One of Robinhood's selling points to customers was that trading was 'commission free,' but due in large part to its unusually high payment for order flow rates, Robinhood customers' orders were executed at prices that were inferior to other brokers' prices," the statement added. https://www.cnbc.com/amp/2020/12/17/sec-charges-robinhood-with-misleading-customers-about-how-it-makes-money.html
what about those asterisks? smart folks on RH already know this, no?
😣☹️
Class action coming soon
It’s a common practice throughout the retail brokerage model, Schwab e trade tastyworks, everyone sells flow
It’s not about selling flow. It’s about the regulatory defined “best price” being $100, and Robinhood can choose to execute customers trades buying at $97 or $98, and they choose the $98 because it makes them more money
The charge wasn’t for the practice, it’s not illegal everyone does it. It’s for not disclosing it to their users. And they do now this is for the time period 2015 to 2018!
Makes sense. Any time I’ve ever done market buy on Robinhood, the stock seems to have moved against me and I need to hodl for a bit to get out of the hole. It’s just Robinhood scraping off the top.