I've traded insignificant amounts of BTC on Robinhood and noticed when I sold this morning, the price on the chart showed around $70,700. But when I go to sell, I can only sell for 70,050, while I can only buy for 71,200.
That's like a 1% difference from what I expect from what i see on the price, and a 2% loss if I bought and sold at the same time.
Help me understand why Robinhood shows $70,700, buys at 70,050, and sells at 71,200?
byu/cheesenotyours inBitcoin
Posted by cheesenotyours
10 Comments
Robinhood offers commission-free Bitcoin trading but charges a spread—the difference between the bid and ask price—typically ranging from 0.35% to 0.85% for major cryptocurrencies. While not explicitly listing the spread, they often apply a flat difference of roughly 0.2%–0.65%, widening during high market volatility.
It’s called the bid-ask spread, and it’s how the broker makes money. Same for stocks. Buying or selling used clothing. Or anything, really.
I wish it worked like your title says.
Welcome to the ‘Spread.’ When Robinhood (and other brokerages) advertise ‘zero commission’ or ‘no fees,’ it’s a marketing trick. They hide their fee inside the bid-ask spread. The $70,700 you see is the ‘mark’ price (the middle). They sell it to you at a premium (the Ask) and buy it back from you at a discount (the Bid). They pocket that 1-2% difference. Nothing is free, you are just paying a massive hidden premium for their clean UI. Get off Robinhood and use a dedicated exchange with transparent fee structures.
Switch to strike my bro.
That gap you’re seeing is the bid-ask spread — it’s how Robinhood makes money on “commission-free” trades. The $70,700 they show you is the midpoint price, but when you sell they fill you at the bid (lower) and when you buy they fill you at the ask (higher). They pocket the difference. On a volatile asset like BTC that spread can be 1-2%, which means you’re down 2% the moment you make a round trip. Most dedicated exchanges like Coinbase Pro or Kraken show you the actual order book so you can see exactly what price you’re getting and place limit orders to avoid this entirely. Robinhood’s clean UI is nice but you’re paying for it whether you realize it or not.
Also price slippage. I haven’t seen this mentioned. Price can change from the time you click buy to the time you execute. But there is definitely Robinhood taking a cut on the price spread. It’s not ideal for short term trading. The effect is increased during high volatility too, which makes short term trades even harder and less profitable during volatility.
You can put in orders though for certain prices. I’ve done this before and Robinhood won’t execute your order on the price you picked until they at least meet their spread. So it won’t automatically sell at the price you chose when the stock/crypto actually hits that price.
Spread.
Read about what a spread is. It exists in all markets for any asset.
Decentralized exchanges prolly do a better job