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Is the Robinhood app just a huge scam? If so, how do they do it?

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Thread replies: 33
Thread images: 1

Is the Robinhood app just a huge scam?

If so, how do they do it?
>>
>>977167
they lose money on every trade, but they make it up on volume!
>>
Paid order flow.
>>
>>977171
What does that even mean?
>>
>>977245
Its an old joke, which, ironically, is inappropriate here because they actually do make it up on volume.
>>
>>977245
Investor support. They get funded enough to where they don't need to charge commissions I believe.
>>
>>977167
presumably they also make a small amount of profit on all the money they're holding in your account which isn't currently tied up in a stock
>>
>>977167

If you read the app description they tell you they make money from interest on the un-invested funds.
>>
>>977265
>>977273
Nah it's a scam.

Why else would they name their app "Robinhood" after a story of a thief.

Their app seems way too simple and I can definitely tell their is a lot of jewing going on somewhere, but I haven't figured out how they do it.
>>
I don't think it's a scam by itself, but a lot of retarded people are losing money through it. Stock trading with no knowledge is the same as gambling.
I wonder if they're gonna try to analize the data from people's trades and try to predict trends and ride them.
>>
>>977435
>I wonder if they're gonna try to analize the data from people's trades and try to predict trends and ride them.

duh...all platforms analyze their user's data for the purpose of profiting from it
>>
>>977241

https://support.robinhood.com/hc/en-us/articles/204336175-Order-Routing-and-Exchanges
>>
>>977241
>>977572

Oh, and:

https://support.robinhood.com/hc/en-us/articles/202853769-How-does-Robinhood-make-money-
>>
>>977572
Thanks for linking to the page that confirms the answer that I gave 10 hours ago.

Paid order flow.
>>
>>977626

Yes, except, if you read to the end it is a bit more subtle:

"Prior to launching the product, we had some language saying that we intended to generate revenue through PFOF. The reason we removed this was because currently we execute all of our orders through our clearing partner APEX Clearing; as a result, Robinhood does not directly receive PFOF and any revenue we indirectly generate from it is negligible. If we were ever to receive it directly, or if it becomes a significant source of revenue, we will reintroduce that language into the FAQ."
>>
>>978426
As soon as they run out of that sweet VC money, they'll start monetizing the order flow.
>>
>>977167
Depends on your definition of "scam".
They present themselves as just another brokerage, albeit a free one.
The part that could be regarded as a scam is that they're hoodwinking a lot of gullible newbies in to believing this. In reality, their cost-free model means that most if not all services are gutted. drastically reducing the odds of those trading with them.
>>
>>979146
To be fair this is exactly what I want though. I don't need all of the extra services and stuff if I just want to fuck around and use it "For fun"

Of course no serious investor will use it. but it's good for getting your feet wet.
>>
>>979376
>I don't need all of the extra services
They're not "extra".
I'm talking about pretty basic stuff.
Let's say you buy a stock, and it starts crashing after the bell. What exactly are you going to do to save any of your money?
>>
>>979415
>What exactly are you going to do to save any of your money?
Don't invest in that stock in the first place.
>>
>>979146
>In reality, their cost-free model means that most if not all services are gutted. drastically reducing the odds of those trading with them.

Can you elaborate?

How does that work and which services are "gutted"? I don't really understand how brokers work, isn't it just a middleman that buys the stocks you select and then charges a fee usually? What else is there and do people manually do it or is it just a system nowadays?
>>
>>97945
It's done by computers these days, but what you can see and have access to depends on your broker.
A regular broker will charge you commissions, but allow shorting of stocks and access to after hours markets, as well as margin & leverage.
RH runs their commission-free business model by providing none of these things.
>>
>>979146
Robinhood = scam

Confirmed
>>
>>979539
Eh, I'm divided on it.
Being a trader, I find them laughable.
On a capitalist level however, I'm kind of pissed I didn't think of it first.
It's sort of like giving people free rides to buy lottery tickets. Genius!
>>
>>979458
he's mad that you can't short sell. RH supports pretty much everything except short selling, so boo hoo you can't bet on failing companies, just sell out when it starts dropping. You gotta basically stay long all the time, which for most of us starting out isn't a problem.
>>
>>979605
Fug off robinhood shill,


Short selling is the only way to win
>>
>>979146
>>979376
>>979415
>>979451
>>979481
>>979539
>>979594
>>979617
>ITT newfag "traders" with sub-$1k portfolios debate the merits of trading platforms
>>
>>979594
how do you monetize it tho. Payouts from the state running the lotto?
>>
>>979847
Yeah, the state kicking back is the only way I can figure it would work.
Personally, I'd ensure the exchange on the transportation, fuck waiting 'til we get there.
>>
>>979605
>which for most of us starting out isn't a problem.
Lol. Yep.
That wasn't a problem for any of us, either.
Saving this.
>>
>>979605
>You gotta basically stay long all the time,
Are you here from Goldman?
C'mon man. Don't lie.
>>
>>979935
>implying Goldman doesn't profit from shorting
>>
>>979937
>implying Goldman doesn't want us long
Thread posts: 33
Thread images: 1


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