Robinhood made $90m in Q1 2020 off non-marketable limit orders. More-so than any one single entity while being a much smaller company in terms of overall flow.
Which has a very intriguing image near the bottom: imgur.com/rwwl4lq (Robinhood is getting insane rebates on S&P500 transactions)
Article: Robinhood’s Trailing Stop Orders: Extreme Profitability, By Design
Previous article with moar data
Here is Robinhood’s own support article on their stock routing and execution quality. In which it says:
Is Robinhood incentivized to send orders to one market maker over another?
No. To ensure we have a fair system, we don’t take rebates into consideration when we choose which market maker will execute your orders. Also, all market makers with whom we have relationships pay us rebates at the same rate.
Doesn’t seem true but I could be wrong.
As well as their associated SEC Rule 606 data
tldr; your trailing stops don’t trigger as fast as you’d like them to because they make a shit load off the bid-ask spread. As well as seemingly getting a sweetheart deal on S&P500 spread. Market liquidity isn’t your friend when you’re commission free trading.
Disclaimer: This is a guest post and it doesn’t necessarily represent the views of IWB.
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