Start - up brokerage Robinhood has attracted around 10 million users with its mobile app and commission - free trades . However , the brokerage offers sizeable rebates for directing clients ’ orders , a practice known as " payment for order pricing " , which potentially offsets the cost of zero monthly commissions . The app is therefore likely to be executing trades at a slightly higher price than other brokers , according to market analysts .
Start-up brokerage Robinhood has attracted around six million users with its smartphone app and commission-free trades. However, the brokerage takes sizeable rebates for directing clients’ orders, a practice known as "payment for order flow", which potentially offsets the benefits of zero trading commissions. The app is therefore likely to be executing trades at a slightly higher price than other brokers, according to market veterans.