How does Robinhood generate revenue while offering commission-free cryptocurrency trading?

3 answers

• Holloway FengerAug 31, 2024 · 9 months ago
  Robinhood generates revenue through a few different methods. One way is by earning interest on the cash and securities held in user accounts. They also make money through their premium subscription service, Robinhood Gold, which offers features like extended trading hours and margin trading for a monthly fee. Additionally, Robinhood earns revenue from order flow, which means they route customer orders to market makers who pay Robinhood for the opportunity to execute the trades. This practice has been the subject of some controversy, as critics argue it may result in less favorable execution prices for customers. However, Robinhood maintains that they prioritize best execution and strive to get the best possible prices for their users.
  744

  372
• prasanna deshpandeSep 21, 2021 · 4 years ago
  Robinhood makes money in a few different ways. One way is through their Robinhood Gold subscription service, which offers premium features for a monthly fee. They also earn interest on the cash and securities held in user accounts. Another source of revenue is order flow, where Robinhood routes customer orders to market makers who pay for the opportunity to execute the trades. This allows Robinhood to offer commission-free trading while still generating income. It's important to note that while Robinhood may not charge commissions, they may still make money through other means, so it's always a good idea to understand how a platform generates revenue before using it.
  675

  225
• SACHIN YADAVApr 22, 2021 · 4 years ago
  Robinhood generates revenue through various channels. One of the main sources is their premium subscription service, Robinhood Gold, which offers advanced features for a monthly fee. They also earn interest on the cash and securities held in user accounts. Additionally, Robinhood participates in order flow revenue, where they receive payment for directing customer orders to market makers. This allows Robinhood to offer commission-free trading while still making money. It's worth mentioning that other cryptocurrency exchanges may have different revenue models, such as charging trading fees or listing fees for new tokens. Each platform has its own approach to generating revenue and it's important to consider these factors when choosing a cryptocurrency exchange.
  770

  193