A controversial part of Robinhood’s business tripled in sales thanks to high-frequency trading firms

Fain said:
Fidelity doesn't.
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I like that[old timer] General Kevin Haggerty , helped run Fidelity Funds Capital Markets[Gil Morales + Dr Christian Karcher's/Marders book. ]. I don't have a big problem with Fidelity, I did business with them in the past.The current Fidelity '' assessment activity fee on ETFs'' -not so much. But @ least they disclosed it.:cool::cool:
 
Payment for Orders: IB receives payments for certain orders in varying amounts from U.S. options


exchanges, specialists and/or market makers pursuant to the mandatory marketing fee programs that

have been adopted by the exchanges and approved by the SEC. If multiple exchanges are quoting at the

NBBO for an option order and IB has discretion as to where to send the order or a portion of it, IB

generally will “break the tie” by sending the order to an exchange where it will receive the most payment

for the order, or to an exchange designated by a firm from whom IB will receive the most payment at

that market.
 
newwurldmn said:
payment for order flow isn’t that shady. It keeps costs down - it’s the only way Robin Hood can give you free trades. That or they sell all your private information to Russian marketing firms.

you get the hard benefit of lower commissions and give up the soft benefit of “better execution.”
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Investopedia article notes thier 2.6 cents per $100[ payment for order flow] is about 10 times average, on same volume And an additional monthly fee for margin.........

Having said that; one of my rules is ''never quibble over a quarter+ miss the move'' I agree payment for order flow is not shady. But good to know some figured out they make 10 times > than average on it.:D:D
 
The real questions are: Would there have been price improvement if I sent it elsewhere?
Does rebating mean an actual better market really exists and is not be displayed anywhere?
Was NBBO in force and why didn't the order ship if it wasn't?
 
ETJ said:
NBBO is NBBO - if you believe there is a retail firm that does accept any rebates - you must also believe in the tooth fairy.
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Not talking about rebates for the stock exchange maker-taker business model. Talking about payment for order flow selling retail orders to High frequency traders like citadel.
 
All I can say when it comes to order flow I have tested by placing identical orders at firms and almost always get a faster fill (1000 shares or greater) at IB than the other firms I've tested against. For market orders, there is no contest. You will get abused if using market orders with a firm selling flow. The IHS Market figures should be no surprise. There is a reason the HFTs will pay a few pennies per hundred shares and that's because they are taking so much more out of your pockets.

Net US Dollar Price Improvement vs. Industry Bid / Offer 1

Net US Dollars
(per 100 shares)
Interactive Brokers $0.58
Industry $0.06
IB Advantage $0.52
*Based on independent measurements, IHS Markit, a third-party provider of transaction analysis, has determined that Interactive Brokers' US stock price executions were significantly better than the industry's during the second half of 2018.
 
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