Forums  > Off-Topic  > Thoughts on Robinhood (Brokerage tech startup)  
     
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titanium77


Total Posts: 54
Joined: Sep 2012
 
Posted: 2014-03-29 21:09
Commission free broker built as tech startup

quantie


Total Posts: 883
Joined: Jun 2004
 
Posted: 2014-03-29 23:13
It seems like a good idea they should be able to make money from the flow/rebates. They seem to have some strong vc behind them.

egert


Total Posts: 53
Joined: Jun 2010
 
Posted: 2014-04-19 15:52
I think Zecco had the idea of zero-comm brokerage a while ago and their idea might have been selling advertising, but I can't remember any more.

They did stop it though as it seems now. Let's see how Robinhood turns out.

ast4


Total Posts: 390
Joined: Aug 2007
 
Posted: 2014-04-24 13:14
I believe Zeccp was only making money off of lending whereas robinhood has other revenue streams (e.g. payment for order flow, API). Would be interested to see how that API works out for for them.

"Mathematicians are machines for turning coffee into theorems!"

goldorak


Total Posts: 1000
Joined: Nov 2004
 
Posted: 2014-12-11 15:28
I just received my invite. Not being US resident and not having an iPhone (and probably never will...) I cannot open an account with them yet. If someone wants to use it... yours. It is valid 72 hours from now.

This is NOT an advice to trade with them! General disclaimers apply Tongue out

https://robinhood.com/signup/?invite_code=YD4G6IH8

EDIT: received a few more actually... Just replace YD4G6IH8 with

A2TUBSRH
NITGK4QP

If you are not living on the edge you are taking up too much space.

goldorak


Total Posts: 1000
Joined: Nov 2004
 
Posted: 2015-02-04 15:11
One more (I subscribed with different emails to support my first application):

2NDHYCYH

If you are not living on the edge you are taking up too much space.

goldorak


Total Posts: 1000
Joined: Nov 2004
 
Posted: 2015-02-04 18:53
And two more...

RPADUA9V

J2RGYK9P

If you are not living on the edge you are taking up too much space.

jslade


Total Posts: 1096
Joined: Feb 2007
 
Posted: 2015-02-04 23:23
Quantopian is supposed to do something like this as well, though it isn't aimed at the general public. Personally I do not think much of any of these platforms, or the people involved, which I suppose is a flow trading opportunity, depending on who is on the other end of things. People in tech are very naive about trading.

Where I think the tech world may make some inroads is the "wealth advisory" area. Betterment, Future Advisor, Personal Capital, SigFig, Wealthfront, Wealthminder and Yodlee. I had thought to rip off Bill Sharpe's startup back in 2008; while I am glad I spent time doing other things due to the people I had on hand at the time, I guess it was a pretty good idea.

"Learning, n. The kind of ignorance distinguishing the studious."

ComteZero


Total Posts: 523
Joined: Jun 2004
 
Posted: 2015-04-13 16:43
nowadays if someone can't pay fees for a real service such as IB or Saxo Bank, then the guy has a problem with his trading performance...
and the famous applies : "if you don't pay for a product, then you are the product"

/* Trust is good, no trust is better. */

HitmanH


Total Posts: 437
Joined: Apr 2005
 
Posted: 2015-05-07 17:17
Saw this: https://robinhoodapp.zendesk.com/hc/en-us/articles/202853769-How-does-Robinhood-make-money-

No mention of order flow selling.
Does anyone know if they do?

EDIT: I just saw: https://robinhoodapp.zendesk.com/hc/en-us/articles/203645555-What-is-payment-for-order-flow-Does-Robinhood-receive-payment-for-order-flow-

Rashomon


Total Posts: 171
Joined: Mar 2011
 
Posted: 2015-05-13 05:03
ComteZero, think about it from the other side. No one here might make the switch (and I just looked, they have a limited selection of instruments) – but if it gets a lot of users, a certain kind of volume will increase.

"My hands are small, I know, but they're not yours, they are my own. And they're, not yours, they are my own." ~ Jewel

ManagedFuture


Total Posts: 5
Joined: Nov 2015
 
Posted: 2017-11-01 20:00
I have a couple of friends working at Robinhood that can't stop raving about how much they are killing it. They already have 3 million users and I'm guessing that the total asset clients should be at least a few billion with less than 100 employees. What are your thoughts on their growth/trajectory? I can't see why they won't eventually crush other retail brokers which have tons of overhead costs with brick and mortar shops, advertising, lack of automation of compliance/operations.

Osiris2


Total Posts: 7
Joined: Sep 2017
 
Posted: 2017-11-02 17:23
I believe that Robinhood's business model is to make money on the float earned on assets, not on order flow. At some point they may be able to extract some value out of order flow, but I think that is difficult because it requires pretty large scale for the amount to be meaningful, and it also tiptoes around some regulatory issues.

I could either open an account at another broker, pay $5/trade for basic equity orders, and get my cash balance swept into a money market. Or I could open an account at Robinhood, pay $0 for basic equity orders, and get nothing on my cash balance. This is for your typical retail account. If I'm institutional money or a sophisticated individual trader I will do neither of those things.

It looks to me like Robinhood should be good at attracting small retail stock accounts that trade stocks frequently and don't keep large cash balances. I'm assuming they do some securities lending to make money on them, but there are limits to what you can achieve there. I think they will not be good at attracting occasional equity traders, anyone with significant cash balances, or anyone who wants a full service shop.
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