Robinhood Financial: Difference between revisions

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Operates on a commission free trading model for individual investors. Generating revenue through:

*Payment for order flow (PFOF):

*Payment for order flow (PFOF): Selling customer trades to high frequency trading firms earning rebates for each trade. This accounts for a significant percentage of its revenue.<ref name=":5">{{Cite web |last=Goldfine |first=Jael |date=January 28, 2021 |title=Robinhood’s business model and backlash, explained |url=https://www.businessofbusiness.com/articles/robinhoods-business-model-and-backlash-explained/ |website=businessofbusiness.com}}</ref>

*Robinhood Gold:

*Robinhood Gold: Subscription service offering margin trading and advanced feature for five dollars a month.<ref name=":5" />

*Interest on cash and securities lending:

*Interest on cash and securities lending: Earning from idle cash in user accounts and lending shares to short sellers.<ref>{{Cite web |last=Cabral |first=Sarah |last2=LaCombe |first2=Amy |date=December 1, 2021 |title=Robinhood, Reddit, and GameStop: What Happened and What Should Happen Next? |url=https://www.scu.edu/ethics/focus-areas/business-ethics/resources/robinhood-reddit-and-gamestop-what-happened-and-what-should-happen-next/ |website=scu.edu}}</ref>

Critics argue that PFOF creates a conflict of interest, as they may prioritize routing orders to the highest paying firms rather than ensuring the best execution for customers.

@@ Line 17: / Line 17: @@
 Operates on a commission free trading model for individual investors. Generating revenue through:
-*Payment for order flow (PFOF):
+*Payment for order flow (PFOF): Selling customer trades to high frequency trading firms earning rebates for each trade. This accounts for a significant percentage of its revenue.<ref name=":5">{{Cite web |last=Goldfine |first=Jael |date=January 28, 2021 |title=Robinhood’s business model and backlash, explained |url=https://www.businessofbusiness.com/articles/robinhoods-business-model-and-backlash-explained/ |website=businessofbusiness.com}}</ref>
-*Robinhood Gold:
+*Robinhood Gold: Subscription service offering margin trading and advanced feature for five dollars a month.<ref name=":5" />
-*Interest on cash and securities lending:
+*Interest on cash and securities lending: Earning from idle cash in user accounts and lending shares to short sellers.<ref>{{Cite web |last=Cabral |first=Sarah |last2=LaCombe |first2=Amy |date=December 1, 2021 |title=Robinhood, Reddit, and GameStop: What Happened and What Should Happen Next? |url=https://www.scu.edu/ethics/focus-areas/business-ethics/resources/robinhood-reddit-and-gamestop-what-happened-and-what-should-happen-next/ |website=scu.edu}}</ref>
 Critics argue that PFOF creates a conflict of interest, as they may prioritize routing orders to the highest paying  firms rather than ensuring the best execution for customers.