How Robinhood Financial, Securities, and Crypto make money | Robinhood (2024)

How Robinhood Financial, Securities, and Crypto make money

Our mission is to democratize finance for all. Earning revenue allows us to offer you a range of financial products and services at low cost, including commission-free trading.

Robinhood Financial and Robinhood Securities primarily earn income from the following sources:

  • Margin lending
  • Stock lending
  • Income generated from uninvested cash
  • Rebates from market makers and trading venues
  • Robinhood Gold subscriptions

Robinhood Crypto primarily earns income from the following:

  • Rebates from market makers and trading venues
  • Robinhood Connect

Note

Stock, ETF, crypto, and options trading is commission-free. Other fees may apply. Check out the Robinhood Financial Fee Schedule and Robinhood Crypto Fee Schedule for details.

We earn income from lending securities to counterparties.

Income from cash

Income from cash

Robinhood Securities earns fees from banks that participate in its brokerage sweep program when it sweeps uninvested cash in individual investing accounts to those banks. Robinhood Securities also generates income on uninvested brokerage cash that isn't swept to such banks, primarily by depositing this cash in interest-bearing bank accounts.

Rebates from market makers and trading venues

Rebates from market makers and trading venues

When customers buy or sell stocks, ETFs, and options through their individual investing accounts, their orders are sent to one or more market makers or exchanges for execution. To compete with exchanges, market makers offer rebates to brokerages and typically offer better prices than exchanges.

Robinhood Securities, our clearing broker, developed a routing system to incentivize the market makers Robinhood has relationships with to compete for order flow based on the amount of price improvement realized on customer orders. This algorithm, known as the smart order router, prioritizes sending customer orders to a market maker that’s likely to give you the best execution, based on historical performance. We also route a small portion of orders in stocks and ETFs to an exchange to preserve the ability to maintain trading in case one or more market makers are unable to execute orders. Under applicable exchange fee schedules, we generally pay the exchange when we take liquidity and are paid when we provide liquidity.

Similarly, Robinhood Crypto has relationships with crypto trading venues that allow customers to receive competitive prices. As of May 13, 2022, for every $100 of notional value for executed crypto orders, Robinhood received $0.35 in rebates from its trading venues.Robinhood Crypto receives variable volume rebates from those trading venues for executed crypto orders.

Robinhood Connect

Robinhood Connect

Robinhood Connect is an extension of Robinhood Crypto. It facilitates the purchase and transfer of crypto directly to self-custody wallets and dapps. Fees may also apply depending on how you fund Robinhood Connect transactions.

Check out Robinhood Connect and the Robinhood Crypto Fee Schedule for more details.

Robinhood Gold

Robinhood Gold

Robinhood Gold, a suite of powerful investing tools, gives you access to Morningstar research reports, NASDAQ Level II Market Data, bigger instant deposits, and margin investing at a discounted rate, if eligible. You pay a monthly or annual fee for the subscription. When you invest on margin, you’re borrowing funds from Robinhood Securities. If you use more than $1,000 of margin, you’ll pay a yearly interest on the settled margin amount you use above $1,000.

Other

Other

We make money from a range of other, smaller revenue streams, including proxy service revenue and fees listed in the Robinhood Financial's Fee Schedule.

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How Robinhood Financial, Securities, and Crypto make money | Robinhood (2024)

FAQs

How Robinhood Financial, Securities, and Crypto make money | Robinhood? ›

Robinhood Financial and Robinhood Securities primarily earn income from the following sources: Margin lending. Stock lending. Income generated from uninvested cash.

How does Robinhood make money on crypto? ›

Robinhood Crypto does not charge commission fees for trading crypto. We do generate revenue through volume rebates from trading venues. For example, for every $100 of notional value for executed crypto orders, Robinhood receives $0.35 in rebates from its trading venues. *No commission on trades of crypto.

Can Robinhood become profitable? ›

“We delivered significant profitable growth in 2023,” said Jason Warnick, Chief Financial Officer of Robinhood. “We drove record full-year revenues and substantially higher margins, and in Q4 we had positive GAAP net income.

What is the difference between Robinhood Financial and Robinhood Securities? ›

Investing accounts are offered through Robinhood Financial LLC (member SIPC), which is a registered broker-dealer. Robinhood Securities, LLC (member SIPC) is a registered broker-dealer and provides brokerage clearing services. Both are subsidiaries of Robinhood Markets, Inc.

Is Robinhood Securities and Robinhood crypto the same? ›

Robinhood Securities, LLC is a registered broker-dealer and provides brokerage clearing services (member SIPC. Robinhood Crypto, LLC provides crypto trading. All are subsidiaries of Robinhood Markets, Inc. ('Robinhood').

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