Offer your insights or judgment on the input financial query or topic using your financial expertise. Reply as normal question answering

How does Robinhood stock broker make money?
Disclosure: I don't have an iPhone, so I don't use RobinHood.  That being said, I have a less "they're-out-to-get-ya" view of what they're doing. As a small business owner (2 businesses), employees cost the most.  If you can create a solid business with few (or no) employees and let robots run it, you will drastically reduce your costs.  Joe Polish said it similarly with sales letters, something along the lines of they never complain about a headache, need to take a year off to discover themself, or just need a personal day.  Robots are the same; they do not have human limits.  Most simple trading can be done and maintained by well written code and AI, there's very little need for humans to do anything other than build it.  Think about the efficiency of bitcoin versus all the central banks combined; how many people are employed by central banks? Robinhood states that they are using technology in these ways to minimize costs and they're using a system that doesn't need physical branches (this doesn't mean they will never have them, just that they don't need them).  Robinhood does not indicate that they allow everything to happen for free; only stock trading.  I worked for a large trading firm once and observed that stock trading wasn't the bulk of where they made their money anyway; trading options, futures, index funds, etc are where the big money was and Robinhood says nothing about those being free.  Like the CQM mentioned too, they'll be charging for margin as well. In a way, the individual stock trader is dead; many people - including this forum - prefer index funds, so more than likely, Robinhood will strike up a deal with an index fund company or create their own (this is just easy, passive income with an expense ratio).  In this category, the markets are their playground, but they do need to attract enough people to their platform, thus free stock trading is a good way to do it. As for selling your information for advertising, that is always a possibility, but they have quite a few other options that would be good for most investors (index funds, affiliating with financial fund companies, etc) where they can start before ever needing to dip their toe in selling information.  This isn't to say they won't do it, but that there are few other options they have. The major concern I have for Robinhood is ongoing security.  Just building it and letting it run kind of assumes that there won't be major compromises in the future and as AI evolves, superior AI might be able to crush older AI.