Robinhood is limiting purchases of stocks: AMC, Blackberry, Nokia, and GameStop

Re:Robinhood is limiting purchases of stocks: AMC, Blackberr... by tylerhou on Thursday January 28, 2021 @09:26AM (#25942162)

This is missing the context that Robinhood is required to seek the "best" execution of trades [1]. So Citadel is making a profit yes, but the customer is not necessarily harmed in that profit as Citadel may still be delivering a better execution than other market makers or the actual exchange itself.

[1] https://www.sec.gov/fast-answers/answersbestexhtm.html

Robinhood publishes their execution numbers (as required by the SEC), along with other brokers. At a quick glance, there is nothing out of the ordinary. It's also worth noting that you cannot directly compare numbers as different platforms have different trading behavior.

https://robinhood.com/us/en/about-us/our-execution-quality/

https://www.schwab.com/execution-quality

https://www.fidelity.com/trading/execution-quality/overview

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Re:Robinhood is limiting purchases of stocks: AMC, Blackberr... by fomojola on Thursday January 28, 2021 @09:43AM (#25942419)

Of note here: Robinhood recently (last month) settled charges that they actually weren't seeking best execution.

https://www.sec.gov/news/press-release/2020-321

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Re:Robinhood is limiting purchases of stocks: AMC, Blackberr... by tylerhou on Thursday January 28, 2021 @10:15AM (#25943005)

(In 2018, and the actual charges they settled were not that they weren't seeking best execution. The charges that landed were that they falsely advertised that their execution matched or beat other brokers.

In fact, they were still seeking "best" execution; they just didn't beat other brokerages because of high payments for order flow and misled customers about that.)

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