[gbrits]

So the market maker who pays for order flow data takes the spread. But how are they able to trade with the buyer at $100.01 when there are limit asks on the book already at that price? Seems they need to cut the line?

[vostok]

That's part of thr reason that they pay for the flow. They're able to sell at $100.01 off exchange even if there was someone else who was willing to sell at $100.01 on the exchange first.

This also why I think payment for order flow is bad even if the first order effects are not bad for Robinhood customers under reasonable assumptions.