How Robinhood Financial, Securities, and Crypto make money | Robinhood

How Robinhood Financial, Securities, and Crypto make money

Our mission is to democratize finance for all. Earning revenue allows us to offer you a range of financial products and services at low cost, including commission-free trading.

Robinhood Financial and Robinhood Securities primarily earn income from the following sources:

  • Margin lending
  • Stock lending
  • Income generated from uninvested cash
  • Rebates from market makers and trading venues
  • Robinhood Gold subscriptions

Robinhood Crypto primarily earns income from the following:

  • Rebates from market makers and trading venues
  • Robinhood Connect
Note

Stock, ETF, crypto, and options trading is commission-free. Other fees may apply. Check out the Robinhood Financial Fee Schedule and Robinhood Crypto Fee Schedule for details.

Securities lending

We earn income from lending securities to counterparties.

Income from cash

Robinhood Securities earns fees from banks that participate in its brokerage sweep program when it sweeps uninvested cash in individual investing accounts to those banks. Robinhood Securities also generates income on uninvested brokerage cash that isn't swept to such banks, primarily by depositing this cash in interest-bearing bank accounts.

Rebates from market makers and trading venues

When customers buy or sell stocks, ETFs, and options through their individual investing accounts, their orders are sent to one or more market makers or exchanges for execution. To compete with exchanges, market makers offer rebates to brokerages and typically offer better prices than exchanges.

Robinhood Securities, our clearing broker, developed a routing system to incentivize the market makers Robinhood has relationships with to compete for order flow based on the amount of price improvement realized on customer orders. This algorithm, known as the smart order router, prioritizes sending customer orders to a market maker that’s likely to give you the best execution, based on historical performance. We also route a small portion of orders in stocks and ETFs to an exchange to preserve the ability to maintain trading in case one or more market makers are unable to execute orders. Under applicable exchange fee schedules, we generally pay the exchange when we take liquidity and are paid when we provide liquidity.

Similarly, Robinhood Crypto has relationships with crypto trading venues that allow customers to receive competitive prices. As of May 13, 2022, for every $100 of notional value for executed crypto orders, Robinhood received $0.35 in rebates from its trading venues.Robinhood Crypto receives variable volume rebates from those trading venues for executed crypto orders.

Robinhood Connect

Robinhood Connect is an extension of Robinhood Crypto. It facilitates the purchase and transfer of crypto directly to self-custody wallets and dapps. Fees may also apply depending on how you fund Robinhood Connect transactions.

Check out Robinhood Connect and the Robinhood Crypto Fee Schedule for more details.

Robinhood Gold

Robinhood Gold, a suite of powerful investing tools, gives you access to Morningstar research reports, NASDAQ Level II Market Data, bigger instant deposits, and margin investing at a discounted rate, if eligible. You pay a monthly or annual fee for the subscription. When you invest on margin, you’re borrowing funds from Robinhood Securities. If you use more than $1,000 of margin, you’ll pay a yearly interest on the settled margin amount you use above $1,000.

Other

We make money from a range of other, smaller revenue streams, including proxy service revenue and fees listed in the Robinhood Financial's Fee Schedule.

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All investing involves risk.

Brokerage services are offered through Robinhood Financial LLC, (“RHF”) a registered broker-dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (“RHS”) a registered broker dealer (member SIPC). Cryptocurrency services are offered through Robinhood Crypto, LLC (“RHC”) (NMLS ID: 1702840). The Robinhood Money spending account is offered through Robinhood Money, LLC (“RHY”) (NMLS ID: 1990968), a licensed money transmitter. Credit card products are offered by Robinhood Credit, Inc. (“RCT“) (NMLS ID: 1781911 and issued by Coastal Community Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.

The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Securities products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. Cryptocurrencies held in RHC accounts are not covered by FDIC or SIPC protections and are not regulated by FINRA. RHY products are not subject to SIPC coverage but funds held in the Robinhood Money spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Robinhood Financial's Fee Schedule to learn more.

© 2024 Robinhood. All rights reserved.
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All investing involves risk.

Brokerage services are offered through Robinhood Financial LLC, (“RHF”) a registered broker-dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (“RHS”) a registered broker dealer (member SIPC). Cryptocurrency services are offered through Robinhood Crypto, LLC (“RHC”) (NMLS ID: 1702840). The Robinhood Money spending account is offered through Robinhood Money, LLC (“RHY”) (NMLS ID: 1990968), a licensed money transmitter. Credit card products are offered by Robinhood Credit, Inc. (“RCT“) (NMLS ID: 1781911 and issued by Coastal Community Bank, Member FDIC, pursuant to a license from Visa U.S.A. Inc.

The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Securities products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. Cryptocurrencies held in RHC accounts are not covered by FDIC or SIPC protections and are not regulated by FINRA. RHY products are not subject to SIPC coverage but funds held in the Robinhood Money spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Commission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. listed securities and certain OTC securities electronically. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. Please see Robinhood Financial's Fee Schedule to learn more.

© 2024 Robinhood. All rights reserved.