I understand that Robinhood sells order flow and that you may get a worse fill because of it, but is the average Robinhood user getting 3 cents of slippage on their order of 1 share of Ford worse than a $10 round trip in order fees from a more premium broker on the same trade?

I think the order flow model is better for most retail traders. Obviously, if you're buying $20k in stock at a time, paying the fees will be better, but that's not your average Robinhood user.

Everyone sells order flow. It’s: do you want sale of your order flow to be the only fee you pay or do you want to pay commissions on top of that, too?

That’s not true. Fidelity does not receive pfof.

Their 606 disclosure does have PFOF https://clearingcustody.fidelity.com/app/proxy/content?liter...

First I’ve heard that. I looked it up and this is for options not equity. https://www.spglobal.com/marketintelligence/en/news-insights...

It’s better than free, you get a discount relative to NBBO.

The higher-level argument might be that if PFOF didn't exist, NBBO might be better. If Citadel et al wanted to make markets they'd have to publish their prices.

(Of course, that gets rid of the "market segmentation" signals, so it'd probably make life a little better for institutions and make life a little worse for individuals, on net. No doubt smart people could disagree about how much of each effect there would be.)

> that gets rid of the "market segmentation" signals

Exactly, retail investors should basically be happy with PFOF.