Robinhood stock trading app confirms $110M raise at $1.3B valuation

Re:Robinhood stock trading app confirms $110M raise at $1.3B... by tomp on Wednesday April 26, 2017 @12:22PM (#14204415)

> Robinhood also earns money from rebates its gets for directing its order flow to broker dealers

So they're selling some data (as opposed to running directly on an exchange, without any intermediaries). Or maybe not "selling" in the strict sense (I give you data, you give me money), but in an indirect way (I give you data, and you give me discount on your other services).

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Re:Robinhood stock trading app confirms $110M raise at $1.3B... by harryh on Wednesday April 26, 2017 @12:37PM (#14204574)

I give you data, and you give me discount on your other services

That's not what rebate means in this context. It is, in fact, actual money.

Robinhood also isn't just giving someone data. They're sending order flow to various market makers. Not data about the orders but the actual flow in need of execution.

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Re:Robinhood stock trading app confirms $110M raise at $1.3B... by tomp on Thursday April 27, 2017 @03:52AM (#14209902)

But that's exactly the point; that flow is data, and it's valuable, especially to market makers. If it weren't, they wouldn't be paying for it...

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Re:Robinhood stock trading app confirms $110M raise at $1.3B... by harryh on Thursday April 27, 2017 @11:24AM (#14212169)

That flow isn't really data. Like sure, ok, it's data in the sense that everything is data. But that's not the point. The point of retail flow is that it's not based on other market events but is based on mundane things like regular monthly 401k deposits.

This flow is a source of customers for market makers. Those customers get charged a fee. A % of that fee is rebated back to Robin Hood (or other retail brokers) for being originators of the customers.

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