[HoyaSaxa]

Yes, they receive payment for routing their order flow to specific market makers. KCG (Knight Capital) and Citadel are the two players that typically get the vast majority of the retail order flow. Two Sigma is starting to get in the business as well. The exact amount Robinhood receives is going to vary considerably, but it primarily depends on if the order takes liquidity(market orders + marketable limit orders) or adds liquidity (normal limit orders).

Retail brokers typically end up making ~$0.001 per share + commission + fees + interest on cash balances + financing spread from margin lending and stock loan

Robinhood makes $0.001 per share + fees + interest on cash balances + financing spread from margin lending

I'm skeptical Robinhood will ever be able to become profitable. They're great for the consumer (except for their heavy marketing of margin lending), but I don't see them attracting the power users they need to make the business model work.

If you do use Robinhood:

1) Build a well diversified portfolio (30+ companies) 2) Don't use leverage 3) Don't trade on a daily/weekly basis

[astrange]

> 1) Build a well diversified portfolio (30+ companies)

This is sensible but Robinhood doesn't have fractional shares (it would cost something if it did), so you're really raising the bar on minimum investments here. If you just bought one Vanguard ETF and did nothing else, that'd be a great plan.

[toomuchtodo]

Yeah, but that'd show Robinhood's user base there is no need for the product.

[walshemj]

And TBH if you don't have the finances to be able to hit a $1k minimum buy investing in individual stocks is probably something you should leave for a few years.

[astrange]

I agree, but if you're saving you should contribute a little each paycheck and it's nice to do it $50 at a time instead of $1000!

[investorgator]

DriveWealth, Motif and Folio offer fractional shares, but they are not free.