[Test0129]

RH was a joke from the start. To invoke a no true scotsman, I know literally zero actual traders using the platform. Value investors like Schwab for it's customer service. Sometimes they prefer other firms (Fidelity). Day traders, etc almost universally use Interactive Brokers. Having done some profitable trading in my day I can tell you that IB's platform is arguably the best if your capitalization is less than 500,000 (at these capitalizations you can often find more bespoke brokers with even better access than IB, especially in futures). Their "pro" tier allows direct exchange access, and their API is complete (though antiquated). I'm not sure if they still do it but I distinctly remember them offering a FIX API if you wanted as well. IB's pro features do take some money. You have to pay for exchange access, and you pay per leg. But, as the saying goes, if you aren't paying you are the product (pfof).

RH made it's money through pfof and capturing COVID relief checks.Their brilliant corner in the market was a frontend app so easy to use that you wouldn't even think about the money you're losing. Since RH's release, most brokers offer similar (if not equal) platform usability and RH's lunch has been completely eaten. I would be surprised if it survived a few more years before either going under or being cannibalized by actual brokers.

[SamReidHughes]

RH (and presumably other commission-free brokers) sometimes beat the competition on transaction costs, particularly with low-priced contracts, or where you stand to benefit from blending in with other naive option traders. I maintained cash with them just for that purpose, for a while.

As that's no longer applicable for me, I find more and more reason to move all my accounts to Interactive Brokers. The entire history of their nickel-and-diming fees was easily paid for by letting me enter a single position one day in 4AM-7AM pre-market trading hours, which those other basic brokers (including IBKR Lite) don't support.

RH's health is fine. They are still getting positive net deposits, and they're still adding features. It's a great business to be in. They have insanely high margins and their customers' default behavior is to put more money into them. Once they have IRAs, there won't be a good reason for normal investors who just bag-hold stocks to switch away. They have $6 billion of cash, which gives them a ton of runway.