what do discount brokerage firms think about Robinhood?

[ajacobson]

Multiple question here.

44% of revenue at Schwab is earned interest - trading revenue was about 8% - please read the 2016 annual report which is available online. It is definitely an asset gathering model and that is why competitive pressures will lead to free trading if rates get back up around 5% on the 10 year. Trading has become a crappy business, but it brings in all the cash to earn a spread on.

Schwab actually rebates all ATM fees worldwide. Think how awful that business decision was in the rate environment for the last decade. Fidelity does the same thing with ATM fees.

At IB in 2016 interest income was over $600 million just a few million under commission revenue.

 

[S2007S]

When I spoke with one of robinhoods competitors a couple of weeks ago i mentioned that I used robinhood....she started asking me questions about the platform and asked how could they make money without charging commission so I told them how they made their money, they were a bit surprised but it sounded like in the near future most brokers will be offering free commission trades.

I can't wait for the next round of price commission wars...all one company has to do is release news they are offering $2 unlimited shares trading and you'll see all competition in only weeks follow suit....that's what happened the last time, that's why ameritrade and E-Trade dropped commissions from $9.99 once fidelity dropped their commission costs to $4.95 last year.....

 

[sss12]

"I still have a hard time believe a savvy institutional trader is using RH, for many reasons.

But, more interested in your view on the 10 yr at 450-500. While all hell will be breaking, why will majors go free trading, it is mostly asset management fees anyway ?"

Don't believe anything you don't want to believe. A big profit center is i rate spread. At Schwab the fee free ATM card was costing us over $100 million a quarter. The firms are not wedded to trading revenue. A ton is i rate spread and there hasn't been any. If you look at Schwab's share price it is more highly correlated to the 10 year - rather than volume.

oh, I totally agree. just wanted to know where you were going with it.

 

[S2007S]

Just made my 60th trade today using Robinhood

That's since opening the account in early February

If this were an etrade or Ameritrade account I would have already spent $417 on commissions!!!!!!

 

[FSU]

Can someone confirm if Robinhood allows trading in SPX and VIX options? If yes, do they charge the exchange fees?

 

[lawrence-lugar]

Just made my 60th trade today using Robinhood

If this were an etrade or Ameritrade account I would have already spent $417 on commissions!!!!!!

How are the market and limit orders -- Do you get an instant, and good, fill?
Or do they somehow cheat or scalp your order?
(I'm not being sarcastic or anything...just genuinely wondering)

Because nothing in this life is free. If something is free...you're being a fool, and tool. and belong in a pool with a guy named Zool.

 

[sss12]

How are the market and limit orders -- Do you get an instant, and good, fill?
Or do they somehow cheat or scalp your order?

I asked him this previously....no answer. he may not know what it means.

 

[S2007S]

I asked him this previously....no answer. he may not know what it means.

I don't know what you mean, I mentioned that I only place limit orders and trade between 10-200 shares of a given stock....I don't use market orders....

 

[S2007S]

How are the market and limit orders -- Do you get an instant, and good, fill?
Or do they somehow cheat or scalp your order?
(I'm not being sarcastic or anything...just genuinely wondering)

Because nothing in this life is free. If something is free...you're being a fool, and tool. and belong in a pool with a guy named Zool.

Sorry but I don't understand this whole limit order scalp/cheat thing. If I'm placing a limit order for XYZ at $50.25 and it fills at $50.25 where am I being cheated, thats the price I'm willing to pay...
I could see if I'm trading 20,000 shares and my fill is 3 or 5 cents off but I only trade a fraction of shares, so what am I missing ?

 

[eastern_warrior]

Sorry but I don't understand this whole limit order scalp/cheat thing. If I'm placing a limit order for XYZ at $50.25 and it fills at $50.25 where am I being cheated, thats the price I'm willing to pay...
I could see if I'm trading 20,000 shares and my fill is 3 or 5 cents off but I only trade a fraction of shares, so what am I missing ?

you could be missing trades because your limit might not be sent to the most active exchange or re-routed if an offer is sitting on another exchange. There are other games to could be played by those buying the flow to lean on your order as well.