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Side note, just because you don't pay fees with Robinhood that doesn't make it free. Robinhood has larger spreads than many of it's alternatives.

In other words - Robinhood's competitors make you pay a fee for access to better prices. That seems like a reasonable value proposition to me.




> Robinhood has larger spreads than many of it's alternatives.

You need to be careful about what you mean when you say this. Robinhood should not be offering spreads worse than the NBBO and if they are you should document it.

The vast majority of Robinhoods order flow and execution is paid for by Citadel and Knight, who also pay for the order flow of the vast majority of other retail trading outfits. I'd be very surprised if the spreads were significantly different (though maybe execution times are worse on Robinhood leading to worse fill rates).


I think Kasey is right. As to the question of larger spreads. I worked for Knight before they got into trouble. Robinhood does only stock trading and there is not much spread payments coming form it these days. Its so small these days, its not worth a lot. No matter what its not enough to give away trades. And these firms pay somewhat the same to all companies.

Robinhood is a fascinating scheme of some sorts in my opinion. They will have to raise money from new VC investors to make commission payments. They need to be raising more money. This app will continue as long as they raise money and the VC money feed continues. For the sake of its employees, I hope the feed continues.

"so I am "out". ( Shark Tank :))


I remember when ETrade needed a bailout as they got involved in mortgages during the last housing bubble. They sold all their order flow to Citadel for the bailout.




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