Useful Quote: "In October 2019, Robinhood
gleefully announced to its customers, “Options Stop Limit Orders Are Here,” a nifty feature which essentially puts trading on autopilot. “That [stop limit] order is immediately sold to a high-speed trader who now knows where your intention is, where you would sell,” says one former high-speed trader.
“It’s like you’re writing a secret on a piece of paper and handing it to your broker, who sells it to someone who has an interest to trade against you.”
...Billionaire competitor Thomas Peterffy, the founder of Interactive Brokers, says stop limit orders are the most valuable orders a sophisticated trader can buy. “If people send you orders, you see what they are. You can plot them up along a price axis and see how many buy and sell orders you have at each of those prices,” he says. For instance, if a buyer sees sell orders bunched up around a certain price, it means that if the stock or option hits that price, the market is going to fall hard. “If you are a trader, it’s good for you if you can trigger the stop—you can go short and trigger the stop, and then cover much lower,” Peterffy says. “It’s an old technique.”