[gruez]

>Citadel and friends pay to trade with you because they think you’re dumb and they can make money off you. They’re giving you or your broker a better deal because they think they’re smarter than you. That’s all it is.

More to the point, just because they're smarter than you, doesn't mean you're taking a loss by trading with them. The public markets are shark tanks, and it's better for both sides to avoid it. Market makers can make money off the spread (eg. buying at $3.14 and selling at $3.16 and pocketing the difference) without the risk of getting run over by a hedge fund, and retail traders benefit through tighter spreads, which the market makers can offer because they know the typical retail trader isn't a shark.

[chii]

> because they know the typical retail trader isn't a shark.

so why don't the sharks use robinhood, which then they can do their shark thing there, but at a better price than before?

[gruez]

1. "sharks" in this case doesn't mean some guy trading out of his house with 6 monitors. They are institutional investors. They can't exactly open a robinhood account, which only serves actual people. Professional traders also value other niceties, like being able to trade on their desktops (rather than having to type in their orders on their phones), which is worth the 1-2 cents per share in potential savings.

2. It doesn't have to be 100% effective. For every day trader that's beating the market and running over market makers with $1M orders, there's a 100 that's losing everything in ill timed trades on meme stocks. As long as there's less sharks than the public markets, they'll come out ahead.

[GenerWork]

>Professional traders also value other niceties, like being able to trade on their desktops

In fairness to Robinhood, they did just release a desktop version[0].

[0] https://robinhood.com/us/en/legend/

[gruez]

I stand corrected, thanks!

[n2d4]

Robinhood doesn't want the sharks because that would cut into their monetization strategy. So they specifically don't build features that sharks would need, some just convenient (eg. trading interfaces), some very important (eg. tax statements).