Yabbut, I can buy $1m in stocks for $9.95, and that includes storage costs and insurance against fire/quakes/storms. And sell it tomorrow for $9.95.
https://seekingalpha.com/article/4205379-robinhood-making-mi...
In fact it's the perceived lack of front running risk by the buyers and sellers that make Robin Hood more valuable to Market Makers.
A big institutional shareholder may very well know more than the Market Maker at the other end of the trade, that's a risk for them if the market moves against them. Robin Hood investors are far less likely to have that kind of information so there isn't the same risk that market makers will get shafted.
Basically, you get a discount trading on Robin Hood, because the people taking the other side of the bet know that you're probably not making a smart move.
On less liquid names you might have legitimate worries of big market impact, but usually what you get is the bigger the volume you trade the less you pay for actual execution.
That is, I expect to pay lower fees per share the bigger my volume is, not more. A retail(ish) broker will charge you $0.01 per share plus some fixed transaction fee.
An IB with access to dark pools and clever algos will charge you $0.0005 per share and pass on any rebates you get from exchanges if you provide liquidity (as many big orders will), but they will expect you to trade a hundred million $ per day and up.
Edit: looks like this is common in day-trading platforms?
But a good incentive to do less than 10 trades per year across 6 accounts.
I just sit in a small number of big ETFs.
The brokerage would make a lot more money off me if they charged $1/trade.