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This is a well known fact. If a stock broker is offering zero commission trades, any competent investor or trader would look into how they can offer their servi
by riskneutral 6y ago
This is a well known fact. If a stock broker is offering zero commission trades, any competent investor or trader would look into how they can offer their service for free before using it. They make money by selling your orders to market makers. Market makers can withdraw liquidity from a stock if it becomes too volatile for them to be able to provide market making service on. So it makes sense that Robinhood halted trading on Gamestop, if they have no one to sell that order flow to. The alternative would be to start charging commissions but you can't expect them to turn their business model upside down overnight.