Seven Robinhood order categories sit outside its headline Rule 606 routing tables

Robinhood’s public order-routing tables do not cover seven categories of stock orders that can arise from some of the brokerage’s most recognisable retail features. Its fourth-quarter 2025 Rule 606 report says fractional-share orders, dollar-based orders, recommended ETF-portfolio investments, Robinhood 24 Hour Market orders, paycheck and roundup investments, certain recurring and dividend-reinvestment orders, and orders entered by Robinhood Asset Management are treated as “not held”. They are therefore excluded from the report’s summary statistics and routing percentages.[1]

The exclusion is disclosed repeatedly in the filing and is not, by itself, evidence that the orders are unreported or improperly handled. Rule 606 separates public quarterly reporting for held orders from customer-specific reporting for not-held orders. The consequential finding is about the boundary of the headline tables: a reader cannot take Robinhood’s published venue percentages and assume they describe all stock orders generated through the app. The filing does not state what share of total order count, shares or dollar value the seven excluded categories represent.[1][2]

The excluded categories reach into everyday retail behaviour

Four of the seven categories can be generated without a customer typing a whole-share order during ordinary market hours. A customer can enter a dollar amount, buy a fractional quantity, schedule a recurring investment, reinvest a dividend, split a paycheck into investments or direct roundups into securities. Another category covers 24 Hour Market trading. The final two concern recommended ETF portfolios and orders from Robinhood Asset Management, the group’s registered investment adviser. Together, the list spans self-directed, automated and managed-investment workflows.[1]

That breadth matters because Rule 606(a) tables are often used as a quick map of where a retail broker sends orders and what it receives from venues. For October 2025 S&P 500 held orders, Robinhood Financial reported 46.32% of non-directed flow going to Virtu Americas, 14.62% to G1 Execution Services, 13.47% to Jane Street, 10.30% to Citadel Securities, 9.28% to Hudson River Trading and 6.01% to Two Sigma Securities. The top three accounted for 74.41%; the top four, 84.71%. Those calculations describe the included held-order population, not the excluded workflows.[1]

The routing chain also crosses two Robinhood broker-dealers. Robinhood Financial, the customer-facing introducing broker, says it routes customer orders to affiliated clearing firm Robinhood Securities, which sends them to third-party market centres. The filing says revenue and costs received or paid by Robinhood Securities, including venue revenue, are shared under a revenue-and-cost allocation agreement and that Robinhood Securities passes 80% of such revenue to Robinhood Financial. For options, the displayed payment amounts accordingly represent 80% of the payments the clearing firm received from the venue for the introducing firm’s order flow.[1]

Held versus not held turns on discretion

The legal distinction is not simply “whole shares versus fractions”. SEC guidance says a not-held order typically gives a broker-dealer discretion over price and time, while a held order is one the broker must attempt to execute immediately. Different disclosure duties follow. Quarterly public reports aggregate held-order routing. For not-held orders, Rule 606(b)(3) can require a customer-specific report, on request, covering the prior six months, subject to specified exceptions.[2]

The SEC’s own examples make customer expectation central. Its staff guidance considers a cash order that creates a fractional component. If the customer reasonably expects immediate execution, the guidance says the broker should categorise it as held; if the customer expects the broker to use discretion over timing, it is not held. Robinhood’s report states that customers in the seven categories have granted the firm price-and-time discretion. The unanswered question is where that grant is made operationally and how prominently a user understands it when placing or automating an order.[1][2]

There may be legitimate processing reasons for discretion. Fractional and dollar orders can require a broker to translate a cash instruction into shares, combine customer interests, manage residual fractions or use an affiliate’s batching system. Recurring and dividend-reinvestment programmes may run on schedules rather than as immediate market instructions. Managed portfolios involve an adviser’s decisions. Overnight orders use a different trading environment from the main exchange session. None of those mechanisms proves inferior execution. They do mean that a simple public venue table does not answer how the excluded orders were timed, aggregated or priced.[1][2]

The boundary expanded as Robinhood’s product set changed

The equivalent fourth-quarter 2024 report listed six excluded categories. By the fourth quarter of 2025 a seventh had been added: orders entered by Robinhood Asset Management. The earlier report already excluded fractional, dollar-based, recommended-portfolio, 24 Hour Market, paycheck or roundup, and specified recurring or dividend-reinvestment orders. The later addition shows that the perimeter of the public held-order table can change as a brokerage adds affiliates and products, even when the basic reporting rule stays the same.[1][6]

That evolution is not necessarily a defect. An investment adviser entering trades for managed clients may legitimately exercise discretion different from a self-directed customer’s immediate order. The analytical problem is that the public report presents no bridge from one quarter’s covered population to the next. A change in venue share could reflect routing decisions, a change in customer behaviour, or a shift of orders into or out of an excluded category. Without volume reconciliations, those effects cannot be separated.[1][2][6]

Customer-specific not-held reports are not a substitute for an aggregate denominator. They can help an eligible customer understand that customer’s prior six months, but they do not show the public how much of the brokerage’s system sits outside the held-order tables. They also depend on customers knowing that the report exists and making a request. For a mass-market brokerage built around automation and simplified interfaces, the accessibility of that route to disclosure is itself an execution-transparency question.[2]

Venue payments also cannot be ranked without context. The report displays different payment rates by venue and order type, while Robinhood explains that differences can reflect the mix of symbols executed. A higher displayed payment does not prove that a route produced worse execution, and a lower payment does not prove it was best. The relevant test is whether the broker’s process seeks the most favourable terms reasonably available after considering price, speed, likelihood and other execution factors. That is why payment, routing share and Rule 605 execution quality need to be assessed together.[1][4][5]

The public denominator is the missing fact

Without the volume of excluded flow, the materiality of the boundary cannot be calculated. If the seven categories represent a small fraction of stock orders, the public table remains a close approximation of the overall retail-routing picture. If they represent a large fraction, the table describes only one part of the brokerage. Robinhood’s growth in fractional investing, recurring products, managed portfolios and overnight trading makes the question commercially important, but the Rule 606 report itself does not supply the denominator.[1][3]

Three denominators would be useful: percentage of total customer stock-order count, percentage of shares and percentage of dollar value. They need not move together. A high number of small recurring purchases could dominate order count while representing a modest share of value. A smaller number of managed-account rebalances could represent more dollars. A 24 Hour Market order may be whole-share and large but still outside the held-order table because of the discretion Robinhood says applies. Publishing all three would show whether the exclusion is operationally marginal or central.[1]

The report’s payment figures have a related limit. Robinhood has said its Rule 606 reports present some, but not necessarily all, payment for order flow required under the rule and should be read with its financial filings. The route from customer-facing broker to affiliated clearer and then to external venue means a reader must distinguish the gross payment received by Robinhood Securities, the 80% allocation to Robinhood Financial and consolidated group revenue. A figure in one table should not be assumed to equal the group’s entire economic benefit from routing.[1][3]

New execution-quality reports solve a different problem

From 1 August 2026, expanded Rule 605 requirements applied to Robinhood Financial and Robinhood Securities for the first time, according to the company’s filing. The SEC amendments broadened the entities subject to execution-quality reporting, changed order categories and required summary execution-quality reports. Those disclosures are designed to help investors compare execution performance, including speed, price improvement and effective spreads. They do not erase the need to understand which orders sit in which Rule 606 category.[3][4][5]

Rule 605 and Rule 606 answer related but distinct questions. Rule 605 concerns execution outcomes at reporting entities. Rule 606 concerns routing and economic arrangements, with different treatment for held and not-held orders. A complete assessment of a broker therefore needs both: where orders went, what incentives accompanied the route, and what execution customers received. The excluded categories are especially relevant because automated or discretionary handling may change both the timing of an order and the market against which execution should be evaluated.[2][4][5]

An open investigation increases the need for precision

Robinhood has disclosed that, since July 2023, it has been cooperating with a New York Attorney General investigation concerning brokerage execution quality and the collaring of prices on certain trade orders. It has also disclosed regulatory scrutiny concerning technology and the overnight BOATS venue. Those are ongoing or disclosed investigative matters, not findings of wrongdoing. They make it particularly important not to overstate either side: the seven exclusions should not be called concealment, but neither should the held-order table be presented as a complete picture of Robinhood execution.[3]

The 24 Hour Market category illustrates the point. Robinhood’s report excludes those orders from the held-order percentages, and the company has separately disclosed requests for information after disruptions at BOATS during the overnight session of 4–5 August 2024. An outage does not establish poor routine execution, and a not-held classification does not establish a conflict. But a customer evaluating overnight trading needs information specific to that venue and session rather than statistics dominated by daytime held orders.[1][3]

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