No introducing broker may touch your funds. The clearing broker, for them APEX, is the only custodian of the cash and securities and provides SIPC.
I find it amusing once again that a company started by some 20 somethings out of blue offering free stock trading only a few years ago is now becoming a house hold name with close to 5 million accounts. Do I believe the value of this company is over extending...I do. Is it worth $5 billion? I don't believe it is....especially when compared to the likes of these big online brokers.... Ameritrade market cap is $35 billion 11 million accounts and 10,000 employees 40+ years in business E-Trade market cap is $15 billion Around 4 million accounts 3000+ employyes 30+ years in business Schwab market cap is $75 billion Around 11 million accounts 17000 emoyees 47 years in business
It's on cash... I assume people that use Robinhood would actually buy stocks with it? Funds make that % on the total assets. Maybe Robinhood should do the same. Charge 1-1.5% of total account. Funds also don't trade that much, well... not the ones charging only 1-1.5%. They are buy-and-hold and maybe re-allocate quarterly. And some charge extra on initial purchase. My guess, if you trade often with Robinhood, they will lose money on you.
I may not be up to speed on this... but the FCM has SIPC insurance? Doesn't their risk disclosure specifically state they do NOT have federal agency insurance??
They all take advantage of customers funds. Why wouldn't they. As for Robinhood they clearly state how they make their money....using your money and hundreds of millions more to grab that 1-2% interest...trust me to run an app with basic coding and maybe a couple of hundred employees is costing them how much a year??
[ Of course..... Robinhoods average account size is pennies compared to the likes of Ameritrade, E-Trade and achwab