> It wasn't lost on people that the app, named after the outlaw hero who stole from the rich and gave to the poor, was quick to shut it all down with one phone call from the rich.
From what I understand so far, this is likely a misleading take on what happened.
Also, the author falls into the same trap as other reporters--not accounting for the other brokerages that did the same "shut it all down" things.
Then there's this "you're the product" meme, which is really being stretched thin these days, applied to all kinds of situations. When you look at the details, RH is not the same as a free service like Facebook.
(Beyond which you can even argue that you _are_ the customer on Facebook, depending on what you're doing on the platform. And doing so will also help you better understand how Facebook works, which "summing it all up" memes never really promised to do in the first place)
Looking at "free": I pay for RH Gold, meaning I pay a fee plus interest rate. The customer service has been fine. They refer to me as a customer in their communications. They update me on market conditions and send emails reminding me to do things like update my trusted contact information and look after other important details.
It's not the only brokerage I use, but it's easily a better customer experience than other brokerages in those ways and others. The app alone strikes a great balance between "not useful enough" and "overburdened with interface depth."
> Update: A representative for both Citadel and Citadel Securities told Inc. that these are completely separate companies with a firewall between them.
Could the writer not have asked about this before hitting the Publish button?
> Could the writer not have asked about this before hitting the Publish button?
The news cycle is fast as it is and especially this situation is developing rapidly, so you lose a lot the longer you wait. There's a good chance they even asked before publishing and only got a response later.
Like every other "fremium" product on the market that isn't taking Softbank money, RH will eventually increase fees once it takes market share. This is just the promo period.
I’m sure RH had more order flow to sell (zero-commissions = more trading) and securities lending of shorted stocks must be incredibly profitable.
But assuming they must* be doing something much different than the other brokers to have $0 commissions is a myth.
Reality is that every discount broker would have had substantial revenue to work with without commissions, but didn’t have any competitor to push them to do that until RH came along.
Exactly. I looked for 10 minutes to see if there were brokers who didn't sell the data and whether there was a correlation with permitting GME trades on Wednesday. I could not find any major brokers that didn't sell data.
I'd like to see this more prominently declared. But as it is, RobinHood are far from unique.
IB has multiple tiers (and "Smart routing" vs. "Direct routing" IIRC) -- with very different cost structures; I always assumed that selling the order flow is what makes the cheaper ones cheaper. Does anyone know for sure?
9 comments
[ 3.9 ms ] story [ 32.6 ms ] threadFrom what I understand so far, this is likely a misleading take on what happened.
Also, the author falls into the same trap as other reporters--not accounting for the other brokerages that did the same "shut it all down" things.
Then there's this "you're the product" meme, which is really being stretched thin these days, applied to all kinds of situations. When you look at the details, RH is not the same as a free service like Facebook.
(Beyond which you can even argue that you _are_ the customer on Facebook, depending on what you're doing on the platform. And doing so will also help you better understand how Facebook works, which "summing it all up" memes never really promised to do in the first place)
Looking at "free": I pay for RH Gold, meaning I pay a fee plus interest rate. The customer service has been fine. They refer to me as a customer in their communications. They update me on market conditions and send emails reminding me to do things like update my trusted contact information and look after other important details.
It's not the only brokerage I use, but it's easily a better customer experience than other brokerages in those ways and others. The app alone strikes a great balance between "not useful enough" and "overburdened with interface depth."
> Update: A representative for both Citadel and Citadel Securities told Inc. that these are completely separate companies with a firewall between them.
Could the writer not have asked about this before hitting the Publish button?
The news cycle is fast as it is and especially this situation is developing rapidly, so you lose a lot the longer you wait. There's a good chance they even asked before publishing and only got a response later.
> Schwab earned 1.4% of revenue from payment for order flow, TD Ameritrade about 8.4%, and ETRADE about 6.1%.
It turns out that commissions were ~50% of revenue at IKBR and in 2018:
> 6.8% at Schwab, 28% at TD Ameritrade, and 17% at ETRADE
https://www.kalzumeus.com/2019/6/26/how-brokerages-make-mone...
I’m sure RH had more order flow to sell (zero-commissions = more trading) and securities lending of shorted stocks must be incredibly profitable.
But assuming they must* be doing something much different than the other brokers to have $0 commissions is a myth.
Reality is that every discount broker would have had substantial revenue to work with without commissions, but didn’t have any competitor to push them to do that until RH came along.
I'd like to see this more prominently declared. But as it is, RobinHood are far from unique.
Is the most expensive one NOT being sold?
https://www1.interactivebrokers.com/en/index.php?f=44074#sec...
"3. This revenue is from Options exchanges only, where the payment isn’t tied to specific orders."
IB says 'smart routing' gets a 47cent/100share price improvement, or about half a cent per share. Unsure how that gets weighted.
https://www1.interactivebrokers.com/en/index.php?f=1685