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How does Robinhood stock broker make money?
Robinhood seems interesting. Some say it's a gimmicky site with a nice UI not an investing or trading platform. From investopedia: 1. For now, the app stays afloat for mainly two reasons. First, the business itself is extremely lean: no physical locations, a small   staff, no massive public relations campaigns and only one operating   system platform to maintain. Robinhood also generates interest off of   unused cash deposits from user accounts according to the Federal Funds   rate. 2. Second, venture capitalists such as Index Ventures, Ribbit Capital,   Google Ventures, Andreessen Horowitz, Social Leverage,and “many   others” have invested more than $16 million in the app. 3. According to Barron’s, Robinhood plans to implement margin trading in   2015, eventually charging 3.5% interest for the service. E*Trade   charges 8.44% for accounts under $25,000. Phone assisted trading will   also be available at $10 per trade in the future. 4. Originally, Robinhood planned to make money off of order flows – a   common tactic used by discount brokerages in the 199﻿0s to generate   revenue. According to the company's FAQ, Robinhood backpedaled on the   idea because it executes orders through a clearing partner and, as a   result, receives little to no payment for order flow. The company is   willing to return to its original plan in the future if it receives   order flows directly or begins to generate a lot of revenue from them.