Well, the money comes in payments for flow, obviously. In the more volatile markets that flow will be worth even more.
Millennials with 5k trading off their phone. Now let them borrow 50% w/ leverage....ending badly may turn out to be a major understatement.
@sle....totally understand the lending model (huge push at the wire houses) but is payment for flow enough to sustain an on going brokerage with all the current regulatory costs, etc ? Thanks
Margin and other stuff is nice, but not enough. What really makes the mint is that HFT firms pay them to route their orders to them (aka as "pay for flow"). Here is their SEC Rule 606 Report Disclosure, last page has the details of how much they get paid for orders: https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal/RHF PFO Disclosure.pdf
Amazing that with all the bs about transparancy, etc a business model can run off behind the scene order flow. Guess there is nothing wrong with it as long as it is fully disclosed.
LOL. They are transparent all right of course, on the web site they never mention it outright: https://support.robinhood.com/hc/en-us/articles/202853769-How-Robinhood-Makes-Money
Thanks for info, didn't know it was so profitable. "100% of orders undirected". What ! People trading off their phone aren't routing their orders ! LOL