"That Robinhood sold its order flow is unremarkable, but the scale of its activities certainly merits comment. Forbes reports that in the first quarter 2020, 70% of Robinhood’s revenues derived from payments for order flows, as opposed to 17% for E-Trade and just 3% for Schwab. Yes, Robinhood has observed standard practice–but with distinctly above-average enthusiasm."
Comments
All brokerages make money from PFOF -- but it is a much larger revenue stream for RH compared to other brokers.
https://www.morningstar.com/articles/1015686/robinhood-was-i...
"That Robinhood sold its order flow is unremarkable, but the scale of its activities certainly merits comment. Forbes reports that in the first quarter 2020, 70% of Robinhood’s revenues derived from payments for order flows, as opposed to 17% for E-Trade and just 3% for Schwab. Yes, Robinhood has observed standard practice–but with distinctly above-average enthusiasm."
Now I want to know where schwab gets the other 97% from.
Why is this a surprise to anyone? How did customers think Robinhood was making money?