As a user of the Robinhood brokerage for all of my "fun investment money" I'm a fan of this. I do wonder how the big banks are going to respond however as this is blatantly a "shots fired" kind of event.
I was just highlighting the horrible rates that banks currently provide in the customer's favor even if you are a loyal patron holding a substantial (for the vast majority of people) sum of money.
[1]https://www.bloomberg.com/news/articles/2018-10-15/robinhood...
Every single broker like Robinhood sells order flow to electronic trading firms. This flow is then executed faster due to improved market access. All of that to say that you're probably getting better execution because Robinhood wasn't stupid enough to try to go through some crappy broker or build their own order entry system.
Also, the order data can not be mapped back to you. That simply isn't how the stock market works at all. Every single other broker (Schwab, Merril Lynch, etc) does this.
Source: I work for one of those big market making electronic trading firms, the kind you try to demonize but fail fundamentally to understand.
You might work in IT for a market making electronic trading firm (it's not big, I looked them up). I'm a securities regulation attorney. I've worked for banks, hedge funds, and RIAs. This is so far away from best execution that any attempt to argue that this is to the consumer's benefit shows you fundamentally do not understand the fiduciary duties that brokers are supposed to owe to their clients. You're parroting the party line without fully understanding how the system works (and why should you? you're just a distributed systems engineer) yet you have the audacity to tell me in another comment that I've "read Flash Boys" without doing any research and don't understand how the stock market works.
Okay, bud.
> Almost all retail brokerages employ the practice
The FSA (U.K. equivalent to the SEC) effectively banned the practice a few years ago (2010 maybe?) which curtailed the practice a lot. I'm not sure about other states but the Massachusetts AG's office started looking into it last year, too. Its essentially a kickback paid in exchange for information that allows the "smart money" institutional investors to front-run the "dumb money" retail investors.
Here let me link it to you: https://www.amazon.com/Flash-Boys-Insiders-Perspective-High-...
I used to work with Peter Kovac, the author of that book, and can personally vouch for his integrity. He's a really humble and stand up guy.
This is just marketing to attract the millennial crowd and get them to gamble their money away on stocks(benefiting robinhood of-course).