Robinhood Crisis Reveals Hidden Costs in Zero-Fee Trading Model

Turns out, no-fee stock trades can exact a very high price after all.

Not only for the retail traders sitting on deep losses speculating on meme stocks, or for Robinhood, which faces recriminations for “gamifying” the frenzy that spun out of control and was forced to scramble for billions in fresh cash, but also for the stock market itself, which must reckon with the wild swings that have little bearing on fundamental value.

If the surreal events of the past week hold any lessons for investors, it’s this: that for all its benefits, the “democratization” of the stock market, ...