[anonu]

Robinhood isn't a darkpool - they sell their "dumb" retail flow to the highest bidder wholesale to the likes of Citadel, Virtus, UBS, etc.. etc... Usually they just pick 1. This type of flow is called "PFOF" (pay for order flow). These PFOF players also provide marginal price improvement over the NBBO... marginal - because they always make more money than they pay out - and take marginal risk.

[Havoc]

Do they not match transactions internally first?

Hence when they launched the terrible execution - not enough internal counterparties.

[anonu]

I don't know.. but it's a good question. Matching internally first creates huge overhead, compliance considerations, etc... Unless you already have the right infrastructure in place. For example, you need to report the trades. My guess is they wouldn't do this...