6 ms·

I was coming here to say exactly that. from: http://techcrunch.com/2015/05/07/free-stock-trades/ http://techcrunch.com/2015/05/07/free-stock-trades/ > Tenev sa

I was coming here to say exactly that. from: http://techcrunch.com/2015/05/07/free-stock-trades/ http://techcrunch.com/2015/05/07/free-stock-trades/ > Tenev says Robinhood is charging a 3.5% fee to trade on margin in a private beta of the feature It looks like they're planning to monetize via margin. That would work great if the economy was perpetually in an upswing... but I don't think they would have survived in the great recession. Not to mention the irony of Robinhood making margin calls.

poopsintub 11y ago
They take a pretty good fee to withdraw money. I'm not sure that would be a decent part of their revenue, though.
- what_ever 11y ago
  Withdraw to your bank account?
  - poopsintub 11y ago
    Sorry about that. I must have looked at ACAT - Outgoing for some reason, believing it was ACH.
- vtlynch 11y ago
  Do you have a source for this? For US listed stocks there is no fee throughout the entire transaction (deposit, buy, sell, withdraw): https://brokerage-static.s3.amazonaws.com/assets/robinhood/legal/RHF%20Retail%20Commisions%20and%20Fees%20Schedule.pdf https://brokerage-static.s3.amazonaws.com/assets/robinhood/l... Robinhood has stated for a while that they have a margin feature they plan to charge for: https://robinhoodapp.zendesk.com/hc/en-us/articles/202853769-How-does-Robinhood-make-money- https://robinhoodapp.zendesk.com/hc/en-us/articles/202853769...
this_user 11y ago
They are likely also making money by selling the customer's order flow to large institutions/HFT firms who will happily pay significant sums for this. This is something most other retail brokers are also doing and have been doing for a while. The result is that you as the customer are paying indirectly by getting screwed on your fills. http://en.wikipedia.org/wiki/Payment_for_order_flow http://en.wikipedia.org/wiki/Payment_for_order_flow http://blogs.wsj.com/moneybeat/2014/06/13/payments-to-big-brokers-under-fresh-scrutiny/ http://blogs.wsj.com/moneybeat/2014/06/13/payments-to-big-br...
- kasey_junk 11y ago
  > The result is that you as the customer are paying indirectly by getting screwed on your fills. Citation needed. Its entirely possible that order flow traders are actually providing better/equivalent fills than can be obtained without them. I've seen no long term studies one way or the other, though I admit on first blush order flow payment seems dodgy.
- nlh 11y ago
  I wonder what the actual implications of "getting screwed on fills" really are. If I'm buying AAPL as a casual retail consumer, and the market price at the absolute moment is $121.05, and I get "screwed" with a fill of $121.06, is that really a big deal? Especially considering that a few seconds later the true market price could jump in either direction? As a professional trader who's head is in the moment, sure, that seems bad. But does it REALLY matter for a casual long-term investor? My hunch is no. (I know I couldn't care less if I pay a few pennies more or less - I'm not using Robinhood for day trading, and that's not the point or their pitch.)
bt3 11y ago
Not only this, but I get the feeling that Robinhood is bypassing some corporate social responsibility (and possibly fiduciary duties) if they begin suggesting/ allowing first time investors to start using margin accounts. This is just fuel on the fire of uneducated first-time investors being lured by "$0 commissions".

poopsintub 11y ago

They take a pretty good fee to withdraw money. I'm not sure that would be a decent part of their revenue, though.

what_ever 11y ago
Withdraw to your bank account?
- poopsintub 11y ago
  Sorry about that. I must have looked at ACAT - Outgoing for some reason, believing it was ACH.
vtlynch 11y ago
Do you have a source for this? For US listed stocks there is no fee throughout the entire transaction (deposit, buy, sell, withdraw): https://brokerage-static.s3.amazonaws.com/assets/robinhood/legal/RHF%20Retail%20Commisions%20and%20Fees%20Schedule.pdf https://brokerage-static.s3.amazonaws.com/assets/robinhood/l... Robinhood has stated for a while that they have a margin feature they plan to charge for: https://robinhoodapp.zendesk.com/hc/en-us/articles/202853769-How-does-Robinhood-make-money- https://robinhoodapp.zendesk.com/hc/en-us/articles/202853769...

this_user 11y ago

They are likely also making money by selling the customer's order flow to large institutions/HFT firms who will happily pay significant sums for this. This is something most other retail brokers are also doing and have been doing for a while. The result is that you as the customer are paying indirectly by getting screwed on your fills. http://en.wikipedia.org/wiki/Payment_for_order_flow http://en.wikipedia.org/wiki/Payment_for_order_flow http://blogs.wsj.com/moneybeat/2014/06/13/payments-to-big-brokers-under-fresh-scrutiny/ http://blogs.wsj.com/moneybeat/2014/06/13/payments-to-big-br...

kasey_junk 11y ago
> The result is that you as the customer are paying indirectly by getting screwed on your fills. Citation needed. Its entirely possible that order flow traders are actually providing better/equivalent fills than can be obtained without them. I've seen no long term studies one way or the other, though I admit on first blush order flow payment seems dodgy.
nlh 11y ago
I wonder what the actual implications of "getting screwed on fills" really are. If I'm buying AAPL as a casual retail consumer, and the market price at the absolute moment is $121.05, and I get "screwed" with a fill of $121.06, is that really a big deal? Especially considering that a few seconds later the true market price could jump in either direction? As a professional trader who's head is in the moment, sure, that seems bad. But does it REALLY matter for a casual long-term investor? My hunch is no. (I know I couldn't care less if I pay a few pennies more or less - I'm not using Robinhood for day trading, and that's not the point or their pitch.)

bt3 11y ago

Not only this, but I get the feeling that Robinhood is bypassing some corporate social responsibility (and possibly fiduciary duties) if they begin suggesting/ allowing first time investors to start using margin accounts. This is just fuel on the fire of uneducated first-time investors being lured by "$0 commissions".