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How Robinhood Makes Money

12483 ratings | 898620 views
Robinhood, an investing app valued at over $5 billion, says it's trying to "democratize America's financial system" by making investing accessible to the little guy with free trades. It's an eye-popping valuation for a financial company with opaque metrics and plenty of competition. The young company had its share of missteps as well, prompting questions of whether or not it can handle primetime. Robinhood has faced criticism for business practices that allow it to offer free trading. It also botched the rollout of a checking and savings account feature in late 2018, garnering concern from regulators. But the company's incredible growth and popularity with younger investors – more than 6 million users by the end of 2018 – means it could be a major player in banking moving forward. » Subscribe to CNBC: http://cnb.cx/SubscribeCNBC About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more. Connect with CNBC News Online Get the latest news: http://www.cnbc.com/ Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC Follow CNBC News on Facebook: http://cnb.cx/LikeCNBC Follow CNBC News on Twitter: http://cnb.cx/FollowCNBC Follow CNBC News on Google+: http://cnb.cx/PlusCNBC Follow CNBC News on Instagram: http://cnb.cx/InstagramCNBC #CNBC #Robinhood How Does Robinhood Make Money?
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Text Comments (1166)
J R (9 hours ago)
I love robinhood! They changed my life. Gave my life an opportunity to be profitable
Aleksandar be together not the same (1 day ago)
USA SUCKS USA TECH MADE IN CHINA 🤣🤣🤣🤣🤣
ezyfnef (2 days ago)
Dude from TD said banks in this Country are tightly regulated.
Our Father (3 days ago)
Thank You Robinhood
Heather Feather (3 days ago)
Once the SEC seeks to mimic your operation, it is most definitely doing so with the goal of composing a rule to prohibit that operation.
Freddy Frias (3 days ago)
Robinhood stile money to de public who have a account which then
Elena (4 days ago)
Young investors? Sounds more like young gamblers to me 😂
Pedro Gómez (4 days ago)
I got an announcement from them
Zugzwang Sàvànt (5 days ago)
I am dying to get in the Stock market but Money or Capital is the least of my problems as knowledge and Mentorship looks more of a myth
myrrhbar05 (6 days ago)
Great
cRaZy iS HeRe (7 days ago)
I bought 3 shares from a Cannabis company in Canada on the Robinhood App today.
CLOUDS 592 (4 days ago)
For how much
Vikibe K Sumi (8 days ago)
remimds me of pied piper
manyce400 (9 days ago)
How else is Robin Hood supposed to make money? Sell Ads? There is no free lunch. If they offer free trades someone behind the scenes has to pay for it.
Patrick Jones (9 days ago)
I had a choice of paying off my student loans or trying out investing with this ap... At one point I was up 4k but then amazon, FB and apple dropped a lot last year... Now in total I'm down 3k and trying to slowly work my way up. I just recommend putting your money into a 401k or something else. The stock market is a scam and takes from people.
Duzkenov Asanaly (10 days ago)
“When the something is free, you are the one who is a product”, Robinhood trades with a delay and sells your info to high speed automated traders.
Stupid Flanders (4 days ago)
"Sells your info" implies something much more malicious than it actually is. They essentially tell other trading entities about the price at which you'll be buying or selling. Not exactly an invasion of privacy, and they've gotta make money somehow. This doesn't practically harm the trader in any meaningful way, as they can still get the price they accepted.
Freedom Hotline (10 days ago)
Scam hood. Another way for you to be tracked and have your money stolen
David Eaton (10 days ago)
Robinhood has allowed this generation to get in the market. It early
David Eaton (10 days ago)
It’s good for a start but one you get above 5k you move to a real trader that Willa low you to make as many trades per day as you wish. Unfortunately you need 25k to do this with robin hood
girlsthinkImgay (11 days ago)
process flow routing prevents best execution right ? the final customer pays the price by taking the lower bound of the spread on each order if I am not mistaken ?
Jeff Baker (8 days ago)
use limit
embrj145 (11 days ago)
Stocks are not for the average Jo, i invested 500 bucks and already lost 100 ...
scottab140 (11 days ago)
The tech company.. a couple of desk with computers.. a couple of plants..concrete floors.. and an unfinished ceiling.
Mike Hancho (11 days ago)
Yeah I'm sure the government is looking into sticking their nose into it sockerr
Michael McClay (11 days ago)
Didn't even mention that robin hood is starting a money market account option that pays 3%! That's insane.
rockzzz party (12 days ago)
Berni madoff patner
Serana Müller (13 days ago)
Wallstreetbets?
tryumph jordan (14 days ago)
RH is great! I started out with $500 and now I am at $5,000,000,000
Tim Illguth (14 days ago)
Robin Hood robbed from a oppressive government and associated nobles that were over taxing a working class. He didnt rob from wealthy people how earned thier wealth.
kierow ordiales (15 days ago)
Theyre just modern day scammers.
chris murphy (18 days ago)
i love how etrade wasnt mentioned lol
Joshua Padilla (19 days ago)
So has anyone actually made money with this app?
ihtfp004 (20 days ago)
You’re paying by getting a bad fill. Losing some pennies here and there as the broker dealer skims won’t matter to most retail but if you ever trade size you will get taken to the cleaners. This is the office space business model of taking pennies a few million times and no one will know.
Hoanglong Le (21 days ago)
Well I noticed technically it’s not 100% free although marginal. I noticed every transaction I sell I lose 2 cents from every deal.
MrBigEnchilada (21 days ago)
Making money off this man. Investing used to be for rich people. This literally made investment possible for poor people to get rich
Lifeof westcott (21 days ago)
Iron Man died 😫😫😫
Keamogetswe Advo (24 days ago)
The moment the broker says market maker "good bye"
Jacob Levine (26 days ago)
Robinhood just over charges you when you make a trade
Jacob Levine (26 days ago)
Is this an ad?
YouTube google (1 month ago)
Just like Uber killed the transportation business, Robinhood killed the trading business, I want a company to come for banks nowadays
Goldn Messi (1 month ago)
ROBINHOOD inexperienced kids will CRASH in a down market. But by then they will gain INVALUABLE, PRICELESS Leasons about MONEY, FINANCES, What is more important Financial Future over 24/7 chasing girls. Those young minds who take it on the chin, and survive, lot of them will make it big as they get older. Further, more will lick their wounds, and slowly come back, next time better prepared, and stronger, more knowledgeable. Finance culture, money smarts will grow, and that is very good for everyone, priceless..
Anthony Tran (1 month ago)
Just started on the Robinhood app as a beginner investor and its fairly easy and straight forward to use. I would say the only thing I would recommended is definitely reading the news and YouTube videos, plus earnings and callings to see if your stock that you invested in will rise or fall. Other than that, a greater starter investor app! Also for anyone new, get a free stock from me so you can try out if this app is for you! https://share.robinhood.com/anthont1857
Jmans Comment (1 month ago)
4:25
Tapan Saraph (1 month ago)
Isn't this what Zerodha does in India?
Owen Fisher (1 month ago)
I’m can you make this available in Canada thx?
Anton Pictures (1 month ago)
Rich must be injected with p
Gangsta 47 (1 month ago)
How is robin hood for buy and hold investors?
NoRace (1 month ago)
ALEKSANDR Dugin ["Putin's Brain"] wrote this in his 1997 book: FOUNDATIONS OF GEOPOLITICS In the United States: Russia should use its special services within the borders of the United States to fuel instability and separatism, for instance, provoke "Afro-American racists". Russia should "introduce geopolitical disorder into internal American activity, encouraging all kinds of separatism and ethnic, social and racial conflicts, actively supporting all dissident movements – extremist, racist, and sectarian groups, thus destabilizing internal political processes in the U.S. It would also make sense simultaneously to support isolationist tendencies in American politics".[9] Watch "Kay Griggs Reveals Evil Underbelly of Military and Government -  MUST SEE!!! FULL Interview 1998" on YouTube https://youtu.be/U_qCmuJWiAQ
NoRace (1 month ago)
"Banks are highly regulated "😂😂😂😂🤣😂😂🤣🤣😂😂 6:51
thefilthelement (1 month ago)
Hawken is trying to downplay their value and ability because he works for an investment firm, he wants people to use traditional services so he gets paid. Look at Robinhood's value with "small insignificant" accounts.
chan ak (1 month ago)
Did this video really talk about how Robinhood makes money, or just an ad?
EnRico vs World (1 month ago)
The confidence I’ve gained in trading since joining Robinhood is enormous. I’m willing to grow with the company
Brian Schoedel (1 month ago)
They’re shifting a whole new generation of investors which their assets will grow over time.
chao you (1 month ago)
I love robinhood, two ways to make it big, either you have a lot of money to make money or you help a lot of people to make money and you make money from them.
Dejan Mac (1 month ago)
if youre interested in robinhood videos or investing , growing , saving money come by my channel im a growing entrepreneur
Bilenaire (1 month ago)
I have a better app
Trapnow6402 (1 month ago)
Use my link to get a free stock and I by using my link https://share.robinhood.com/christs4187
Peđa Knežević (1 month ago)
The irony is that actual Robin Hood did NOT take from the rich. He took from king (read POLITICIANS) and church who were stealing (taxing) rich (entrepreneurs of that time) and poor. It helps to read the actual book before commenting and taking parallels. Politicians are getting super f-ing rich without producing a thing. That is the problem, not some people who produce value and EARN money. CNBC and other media, are just puppets of those politicians.
Ron Villejo (1 month ago)
6-year fintech #RobinHood has evidently made a splash among consumers and analysts - to the valuation tune of $5 billion! But there's a lot of cloak-and-dagger in its business model, so I wonder what's the catch behind its no-commission trading?
Cousin Justin (1 month ago)
*N Words Drug Deal*
Ankit Jain (1 month ago)
"staggering" $240
Dinal Abay (1 month ago)
After watching this I am still not clear how it makes it money. The title of this video is misleading.
ANIMESH GAUTAM (1 month ago)
IF YOU THINK BY TRADING AND GREED YOU CAN GET OUT OF YOUR LOANS YOU ARE WRONG. young people from 18 to 25 should not invest at all. only watching and reading the market trend only. start investing by small amount. only bite what you can chew properly. always remember you cannot get rich but you can stay afloat. get a job , fixed assets will ease financial pain in your life. DON'T GET GREEDY OVER THESE STUPID APP . ALL ARE THERE TO MAKE MONEY .
Samara Weaving (1 month ago)
The markets and currency values are control by a secret few. Don't fall into their trap.
Snowfirel (1 month ago)
They have made changes to the "gold" now, and once you pick the 5. or 5% they want to start hitting with percent fees, of 41 cents per month to use it, forget it, and they will not allow you to go back to the old way of doing it, it's a trick set up, been with them for 2 years, going to limit them now. Also, they do not answer the phone.
Mark Lip (1 month ago)
Is it available for non-us citizen?
Aditya Basu (1 month ago)
Yes, it is. However there are certain restrictions such as your nationality. Also you need to be in the US (or have a US address ) and a US bank account. You should contact their support via the app for clarifications.
stenbak88 (1 month ago)
I love this app
Dejan Mac (1 month ago)
if youre interested in robinhood videos or investing , growing , saving money come by my channel im a growing entrepreneur
B. Eder (1 month ago)
It's Called Front Running! You end up paying 3 cents more than you think, on a thousand shares ends up $30 they are charging per trade. If you sell then buy, with out waiting for Settelment, - You get hit with Margin Fees!
Harry Raymond (1 month ago)
I havnt made any profits on robinhood. Shares seems to go up for couple days and than degress for few days..it seems like a waste of time ..I rather save my money and invest in real estate or perhaps gold..
Dejan Mac (1 month ago)
if youre interested in robinhood videos or investing , growing , saving money come by my channel im a growing entrepreneur
Alexis Sanchez (1 month ago)
I use Robinhood and I only invest on index funds and some well known companies.
Dejan Mac (1 month ago)
if youre interested in robinhood videos or investing , growing , saving money come by my channel im a growing entrepreneur
Coco G (1 month ago)
Alexis Sanchez what have you made?
Aldrich Fung (1 month ago)
"...as it tip-toes towards an IPO" So you're telling me I can buy Robinhood, on Robinhood??
GeorgeInHerJungle (1 month ago)
People really need to stop repeating the myth of Robin Hood stealing from the rich. He took money from the government and gave it back to the people.
Jacky Cao (1 month ago)
Robinhood is so innovative that they even invented the iPhone-with-no-notch 7:35
Troy Lee (1 month ago)
Kate Rooney’s hot
Zane Paul (1 month ago)
so.... how does robinhood make money
Bruce Wannng (1 month ago)
TLDR: Collect Intrest for holding your cash and Robinhood Gold SERVICE. Your welcome 🤣
No Hope Equals no fear (1 month ago)
Its called front running. Thats what they are doing. Its amazing its not illegal
No Hope Equals no fear (1 month ago)
Well, wall street needs more suckers, i mean buyers.
No Hope Equals no fear (1 month ago)
I stopped listening after i heard "high spead frequency traders" back them
Lachlan Smith Drone Flights (1 month ago)
The ad on mine is for robinhood
Ricardo Pereira (1 month ago)
95% of small accounts lose money, taking the other side of his clients is what makes this compañy profitable.. Expect a lot of BS if you are profitable and want to withdraw your money
c j (1 month ago)
http://share.robinhood.com/codyj48
Jason Ingram (1 month ago)
In my experience Robinhood isn't a secure trading platform. 2+ years trading with them, I've caught many percentage mistakes and glitches. Find a better trading platform.
see something say something (1 month ago)
Robinhood is great!!
Inverted Triangle. (1 month ago)
It's not available in my country
Raymond Lee (1 month ago)
Can anyone please explain crypto currency. Their purpose in financial transactions. They are also peg to other currencies such as USD or AUD? Can you use this to buy a Big Mac meal? Or are they purely for speculation
robertoloaiza95 (1 month ago)
so what's the catch? do they charge management fees? exit fees? inactivity fees? withdrawl fees? no fees at all?
kinn grimm (1 month ago)
When companies are secretive they are usually protecting themselves. Problem is when there would be criminal activity within an already secretive organisation . Like f.e. erm Trump org ^^ They managed to make things cheaper and are competitive because of it. That now the other companies which are left behind are gunning for them or try similar aproaches is how it works, right?
Eman namE (1 month ago)
Too bad M1 Finance is better.
Brown Thought (1 month ago)
No thanks, I’ll stick with John B.
Black Panther (1 month ago)
Microinvesting
MoreEvilThanYahweh (2 months ago)
Before the great market crash of 1929, even shoeshine boys were talking about stock prices and trends. Food for thought.
Malik Shifferaw (2 months ago)
share.robinhood.com/yakubs1
Martin Xeray (2 months ago)
That much money and no representative to talk to about your account
JayLikesSportbikes (2 months ago)
The users are the products.
Mikkle Chua (2 months ago)
I heard there are server issues on the Robin hood app and selling issues, am I wrong?
issaac zala (2 months ago)
Is there indian version of Ribinhood ?
Clement Chiu (2 months ago)
i first heard of robinhood was through r/wallstreetbets lol
Henry Lo (2 months ago)
hello fellow redditor
Qualms (2 months ago)
Robinhood makes money selling your trading data to other companies at some 10x the normal rate. They're the Facebook of trading
General Kanki (2 months ago)
Qualms yeah will check them out, my favorite so far is M1 due to fractional shares make it easy for a small investors to apply mean variance optimization. Still appreciate Robinhood for just for the disruption. I feel this is as disruptive as when Bogle created the first passive index funds.
Qualms (2 months ago)
+General Kanki Look up Webull and Firsttrade, 0 commish, leagues better in every way
General Kanki (2 months ago)
Qualms better than paying $10 per trade
Trojan Hell (2 months ago)
Robinhood will change the face of trading forever
Eliyahu Setton (2 months ago)
He didn't take from the rich and give to the poor. Robin Hood was a Libertarian, he took from the tax collectors and gave to the citizenry.
Efrain Torres (2 months ago)
Robinhood stole money from the government and gave it back to the people*
Aonghus McDonnell (2 months ago)
if you're not concerned about execution its ok