In the 1990s, online brokerages like E*Trade Financial Corp. were the hot new way to play the stock market. Now, that niche belongs to Robinhood Markets Inc., the Silicon Valley startup that has amassed six million users with a smartphone app, marketing aimed at millennials and commission-free trades. But Robinhood isn’t for everyone. And...
Start-up brokerage Robinhood Markets Inc. 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.