{"id":18784,"date":"2021-05-01T15:04:00","date_gmt":"2021-05-01T22:04:00","guid":{"rendered":"https:\/\/alejandrorioja.com\/blog\/?p=18784"},"modified":"2023-10-12T20:55:45","modified_gmt":"2023-10-13T03:55:45","slug":"how-does-robinhood-make-money","status":"publish","type":"post","link":"https:\/\/alejandrorioja.com\/how-does-robinhood-make-money\/","title":{"rendered":"Does Robinhood Make Any Money?"},"content":{"rendered":"\n

Robinhood<\/a> is one of my favorite apps these days. <\/p>\n\n\n\n

I\u2019m personally super interested in personal finance, and the fact that I can participate in the market without having to pay commissions on every trade makes me very happy. (If you think Robinhood is truly “free”, you’d be wrong. Keep reading why)<\/p>\n\n\n\n

Today, I wanted to explore Robinhood\u2019s monetization strategy as well as their history and future plans. Let\u2019s start with how Robinhood was founded. <\/p>\n\n\n\n

Summary<\/h4>

>>> You can sign up for Robinhood here and get a free stock<\/a>.<\/p>

While Robinhood does not charge for commissions, they make money from Order Flow. <\/p><\/div><\/div>\n\n\n\n

History of Robinhood <\/strong>
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Robinhood was started by Vlad Tenev and Baiju Bhatt, who first met at Stanford.
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After the 2008 financial crisis and the 2011 Occupy Wall Street movement, a lot of people had lost faith in the financial system, and sophisticated tools and access to resources were mostly limited to the wealthy.
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So, Tenev and Bhatt were inspired to create a meaningful way to empower both professionals and first-time investors.
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They first launched Robinhood<\/a> in 2013, a mobile-first commission-free brokerage app. They initially envisioned the app to be a way to easily invest in stocks and made it accessible to everyone, specially to the millennials.
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However, it took their team over one year to go over regulations and get approval from the Securities and Exchange Commission (SEC) and become a FINRA member. The one-year waiting and further working on improvements did not disappoint because it also took them just one year to skyrocket to a million-person waitlist on their app. (I remember being position 200k+ on this list and not being able to contain my excitement)
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They eventually re-launched their app on Apple smartphones and tablets with a sleek interface and enhanced features in 2014, and their Android app in 2015.
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Robinhood is currently valued at $12B (2021) according to Forbes<\/a>.
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Services that Robinhood Offers <\/strong>
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As of 2021, you can buy and sell the following securities on Robinhood:<\/p>\n\n\n\n