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Matt Levine’s Money Stuff: Meme Week Was Too Good to Robinhood

June 27, 2022, 6:24 PM

Robinhood’s crazy week

Robinhood Markets Inc. is in the business of getting people to trade stock (and options, and cryptocurrencies) on their phones. The more people who sign up for accounts, and the more they trade, the happier Robinhood is. The way it makes money is that each time its customers trade stocks (or options, or cryptocurrencies), Robinhood sends their order to a market maker, and the market maker pays Robinhood a tiny fee for the right to execute the order. Unlike many other retail brokers, Robinhood charges these market makers a variable fee that is, roughly speaking, higher for ...