Robinhood routes its users’ orders through a market maker who makes the trades and compensates Robinhood for the business at a rate of a fraction of a cent per share.
This generates a separate revenue from subscription fees paid by Robinhood’s premium user base. The monthly cost for this service is $5 per user.
Margin Trading is Robinhood’s second-biggest revenue generator. In 2021, margin lending accounted for 12% of Robinhood’s net revenue.
Cash deposited into the various banks that make up Robinhood’s Cash Management network renders the company fees.
Robinhood Securities may generate revenue by depositing customer cash into interest-bearing bank accounts.