Robinhood is well known for participating in payment for order flow. But how does this actually affect options order executions in reality?
I typically sell 30 - 45 DTE puts on XSP, and the average bid-ask spread is about 10 to 15 cents.
Currently, I'm using Vanguard and I'm able to consistently close trade either at or slightly better than the mark price.
For example, if I'm opening a short position, the bid is at $3.00 and the ask is at $3.12, I'll typically be able to execute the trade at $3.06 - $3.08.
Practically, would the same be true at Robinhood? Or would I get slightly worse fills, perhaps at $3.06 or below, because Robinhood engages in payment for order flow?
I know there's more variables than the brokerage you use, but my core question is does using a PFOF brokerage like Robinhood give you a disadvantage when it comes to options order executions versus a non-PFOF brokerage like Vanguard?