Robinhood Free Broker: How Do They Make Money? (yikes...)

published 8 months ago by ClayTrader

The Robinhood app is probably one of the most used free brokers among those traders who are beginners and just getting started in the stock market. From a common sense point of view, it logically makes sense that a trader who is new to the market would want a free app and broker that charges $0 in commissions and fees. It is easier to make money trading stocks online when you don't need to be paying some of your profits in the form of a commission, that is obvious. What is much less obvious however is the way in which these apparently "free" brokers such as Robinhood are actually making money to stay in business. To be fair, their business model and how they make money may make no difference to you and your trading strategy; however, it might be making a huge difference. That determination will be up to you, but my goal with this video is to illustrate to you how Robinhood is making money and whether or not it should influence you using them.

more episodes from Learn To Trade Stocks and Options