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by smeeth 2402 days ago
I think, though I'm not sure, that RH makes their money by investing in treasury bills with the cash balances of people's portfolios. You're (most likely) not getting secretly screwed.
5 comments

Contrary to popular belief robinhood makes a good bit of money from selling order data, more than most brokerages. This is due to the fact that most robinhood users are inexperienced, and thus, their trades are less likely to indicate big movements of institutional money. I.e. HFTs pay more for data that is less risky.

Edit: Fun fact, the founders of Robinhood worked at an HFT before starting robinhood, which used to be shown on their LinkedIn until several years ago. Bad optics I suppose.

Pretty much everyone sells part or all of their flow to Citadel or Citi.
Why invest in treasury bills at 1.8% yield when you can invest in margin lending at 5%?