How Does Robinhood Make Money

Robinhood generates most of its revenue from accumulating minimal profits from individual trades.

It accomplishes this by offering customers enticing features such as “free stocks” and commission-free trading.

Robinhood routes its users’ orders through a market maker who makes the trades and compensates Robinhood for the business at a rate of a fraction of a cent per share.

Payments for Order Flow (Pfof)

This generates a separate revenue from subscription fees paid by Robinhood’s premium user base. The monthly cost for this service is $5 per user.

Premium Robinhood Gold

Robinhood’s customers can use margin lending to finance stock purchases with borrowed funds. Users borrow money from Robinhood Securities to invest on margin.

Margin Trading

Cash deposited into the various banks that make up Robinhood’s Cash Management network renders the company fees.

Cash Management Fees

Users who wish to move funds from the Robinhood platform into the services of another broker pay a transfer fee of $75.

Service Charges

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