[ab_testing]

I think that title of this article is click bait. The author himself acknowledges that Robinhood is not the only firm that sells order flow data. Infact all the well known so called discount brokerages sell order flow data and have done so for many years before Robinhood came along. In addition to that, all these firms were selling the order flow data and still charging their customers $7 per trade. That practise would have continued unabated had Robinhood or some other startup not come along and provided free trading platform.

Also from a real world perspective, I have tried Robinhood and Schwab market orders and they are very close to each other (most of the times - same price down to the penny). So I am not sure why Robinhood is geting paid more for their order flow, compared to the other discount brokerages.

Also Robinhood is great for buy and hold investment.

[JumpCrisscross]

> all the well known so called discount brokerages sell order flow

The order flow selling is sensationalised. Everyone does it.

But Robinhood’s order flow being so much more valuable than competitors’ is interesting. And the difference cannot be explained solely by small order size. The market is betting Robinhood trades are profitable to trade against. Given how the UX encourages over-trading and complex trading, I’m inclined to agree.