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High-Frequency Traders Really Love Doing Business With Robinhood

Aug. 14, 2020, 7:18 PM

No one is welcoming the new army of Robinhood day-traders into the stock market more warmly than high-frequency trading firms.

The speed traders -- or electronic market makers, if you prefer labels with less baggage -- pay online brokerages like Robinhood Financial for the opportunity to execute their clients’ buy and sell orders. Many of these come from what traditionally were called mom-and-pop traders, but these days they also likely include a large cohort of bored-stepson-living-in-mom’s-basement traders.

It’s a practice known as “payment for order flow” and is not without controversy. Many critics suspect the reason these sophisticated firms actually...

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