[jesterson]

That's the problem of RH - in your cases stock is managed because of "frictionless UI" whilst it should be managed due to financial considerations but not because they have made it easy as getting a cup of coffee.

You need to understand the model how low cost services like RH operate - they sell all your data to big hedge funds. Guess what happen at certain moment when smart money will decide it's time to cut pigs - massive wealth redistribution with robihooders being cut. It has happened before in history and will happen again since history doesn't really teach majority of us anything at all.

[renewiltord]

This doesn't jibe with what Matt Levine describes as RH's operating model. Unless you're actually informed, this just sounds like Internet urban myth. You actually can get better results because as a retail trader participating with other retail traders you have uncorrelated order flow.

[jesterson]

> You actually can get better results because as a retail trader participating with other retail traders you have uncorrelated order flow.

Hedge funds will get even better results knowing what's robinhooders are betting upon with much better precision.

[renewiltord]

RHer buying VOOG beats hedge funds all the time. It's the safest thing to do over large periods of time. Guy using eTrade buying VOOG does not do much better than RHer buying VOOG. Guy using Ameritrade buying VOOG does not do much better than RHer buying VOOG.

That's because the magic is VOOG, not your platform. And if RH gets you to buy VOOG instead of storing excess dollars in your savings account, then RH is the number one option.

All the returns are in the activation energy of getting to stock one of VOOG. Whether you buy it at 198.86 today or 198.85 will not change your outcome to any significance. What it will do is put you ahead of many hedge funds ten years from now, even if they spend 200 on their portfolio where you spent 198.85.

[kjksf]

That doesn't negate his point (that RobinHood can fill your order just as well, or better, than eTrade or Fidelity).

If you're trying to out-hedge hedge funds then the only way to win is to not play.

You can (and should) use stop limit prices to guarantee a desirable price in which case there's nothing a hedge fund can do to bump you.

And if you're sensitive to 0.1% differential in price then you're trading, not investing.

[qes]

> use stop limit prices to guarantee a desirable price in which case there's nothing a hedge fund can do to bump you

This is VERY misleading - not sure if you just worded it poorly or if you believe this - but a stop limit is NOT a guarantee that your stock will be sold.

Someone has to take the other side of that trade for it to fill. If there's no one there to take the trade - which is common when the price moves quickly - it will not execute.

[jesterson]

> That doesn't negate his point (that RobinHood can fill your order just as well, or better, than eTrade or Fidelity)

That may be right, but "better" order filling or any other bells and whistles will not help to beat the market or gain substantial benefits from it in the long run. I've seen traders sending orders in slow command line and making substantial returns, so the tool perhaps is not the instrument for success on the market in the long run. It's like saying that green car will drive you faster/safer/etc compared to black or white cars, while the most important contribution to speed and safety lies between steering wheel and driver's seat.

> You can (and should) use stop limit prices to guarantee a desirable price in which case there's nothing a hedge fund can do to bump you

Needless to say orders may not (and most certainly will not) be filled when market (or HF) make sharp moves.

[flattone]

Youre saying at some point big HF will say 'a bunch of robin money is in some stock(s)' and make a move to cause losses for the RH folks?

>It has happened before in history

When?

[mlyle]

Big HF will see event requiring lots of RH people to pull liquidity, and know what equities this will move, and move first.

Not to mention that big HFT uses order book data from retail to vacuum away pennies on every transaction.

[chii]

how does order-book sales (if it even happens - apparently it's not legal?) affect your existing shares in RH?

Unless you are trading, tiny differences in the price at purchase and sale is unlikely going to make a big difference to your final total returns. I would just consider it cost of the transaction.