The standard advice for equities investors (at least in the UK) has been to invest in tracker funds for a very long time.
it is possible to beat the market. Many years ago I double my money in approx an year - but I invested heavily in I had been covering as a analyst (one of my previous careers) until immediately before. I am more cautious now.
How much are total costs in the US?
If you trade frequently even low costs add up. If its 0.1% and you trade monthly it ends up being 1.2% over the course of an year.
Now it's effectively 0 for most common trades. Here is Schwab for example:
https://www.schwab.com/pricing
If someone is a big options trader they can probably find a better per contract price out there.
Anyone who really cares about spreads will be using limit orders. Otherwise you're talking about pennies on highly liquid shares.
The fact that we're even discussing the possible spread differences between market makers shows just how commoditized retail trading has become.
NBBO requires that if there is something better that Robinhood gives it to you.
If you just hold your index fund, you don't pay these recurring spreads.
I suspect they're in the business of collecting the spread on lots of small trades that they can assume are largely random.
But yes, the market maker doesn't run the risk of trading with someone with knowledge and a lot of capital to apply it.
They also earn some money from 'payment for order flow'.
I bet the uninvested cash product drives some weird incentives - kpis around increasing ratio of sells to buys and increasing pain around removing cash.
...No? Then, uh, a punitive judgment?
>Small fine that amounts to a cost-of-doing-business.
Ah. Hm.
It doesn't show up anywhere in your statement, but it's a real trading fee nonetheless, so it's still better not to trade too much