Quote:
Originally Posted by highnote
How does robinhood profit from frequent trading if they charge no fees?
Are they front running?
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The only money they are making is interest on non-invested funds. Where a traditional brokerage might put your uninvested in money market 2%.
And the interest free margin money is only available to Gold Accounts that's $120 a year. Every 2000 at ameritrade is $180 (9.25%). so if you use more than 2k its cheaper.
Also, in this new economy, companies like this get valued on active users. Eventually they'll monetize them somewhere, Somehow. Venmo, Zelle, the money transfer applications are the same model.
