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I give you data, and you give me discount on your other services That's not what rebate means in this context. It is, in fact, actual money. Robinhood also is
by harryh 10y ago
I give you data, and you give me discount on your other services
That's not what rebate means in this context. It is, in fact, actual money.
Robinhood also isn't just giving someone data. They're sending order flow to various market makers. Not data about the orders but the actual flow in need of execution.
- tomp 10y agoBut that's exactly the point; that flow is data, and it's valuable, especially to market makers. If it weren't, they wouldn't be paying for it...
- harryh 10y agoThat flow isn't really data. Like sure, ok, it's data in the sense that everything is data. But that's not the point. The point of retail flow is that it's not based on other market events but is based on mundane things like regular monthly 401k deposits. This flow is a source of customers for market makers. Those customers get charged a fee. A % of that fee is rebated back to Robin Hood (or other retail brokers) for being originators of the customers.