Robinhood is making more money per trade than rival brokerages as millennials rush into day-trading

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  • Robinhood made more per stock trade in the first quarter than TD Ameritrade, Charles Schwab, and E-Trade, Piper Sandler said in a note to clients.
  • The relatively young discount brokerage took in $0.0024 per equity trade over the period. The lofty rate allowed Robinhood to make the second-most amount of money in stock trades despite hosting the smallest volume of transactions.
  • Robinhood was likely able to charge a higher rate due to higher order-flow profitability and its use of a fixed rate per spread, Piper Sandler said. The rival firms charge on a fixed per-share basis.
  • TD Ameritrade made the most for each options trade, charging $0.0053 per contract to Robinhood’s $0.0048 fee.
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Robinhood made more from individual first-quarter trades than its legacy rivals, according to Piper Sandler research.

The discount brokerage made $0.0024 for every stock trade, beating out TD Ameritrade, Charles Schwab, and E-Trade. Equities trades netted Robinhood more than $31 million, second to TD Ameritrade’s nearly $73 million windfall. Charles Schwab and E-Trade brought in roughly $22 million and $19 million, respectively, according to Piper Sandler.

Robinhood was likely able to charge a higher rate due to greater profitability in its order flow, managing director Richard Repetto and analyst Kyle Robinson wrote in a note to clients. The relatively young firm also receives a fixed rate per spread, while other brokerages charge a fixed per-share rate.

RH RatePiper Sandler