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1) Robinhood Gold is margin lending i.e. lending money to customers who want leverage. The monthly fee is effectively the loan's interest rate, rebranded in les
by whitepoplar 10y ago
1) Robinhood Gold is margin lending i.e. lending money to customers who want leverage. The monthly fee is effectively the loan's interest rate, rebranded in less shady terms.
2) They have very valuable order flow, which they sell. Almost all of Robinhood's customers are unsophisticated investors. Trading firms pay a lot of money for unsophisticated trading flow as there's room to "skim off the top".
3) Add in the typical "successful VC-backed startup" premium.
- mcguire 10y ago"...less shady terms"? I'd say more shady. If you use less than the margin amount that they allow you, that fee looked at as an interest rate can be rather usurious.
- whitepoplar 10y agoSorry, what I mean to say is that it's very shady, but they try to mask it in innocuous terms.