Re: yesterday’s House hearing -- I think it's interesting why Robinhood is under attack, when other self-clearing(!) brokers that restricted trading of GameStop, AMC, etc. have managed to stay out of the spotlight.

You could say that Robinhood's brand is more ubiquitous. It's likely the company's business model played a big role, too. Conspiracy theories have focused on Robinhood's ties with market maker Citadel Securities (which =/ hedge fund Citadel LLC, though it has the same CEO)

It’s true that many other retail brokerages (think Schwab, E*Trade, etc.) also take rebates from market makers for sending order flow. However, Robinhood relies on this revenue *much* more than competitors.

At the end of 2018, Bloomberg reported that Robinhood was making almost half of its annual revenue from PFOF. That same year, order routing revenue only made up about 1.4% of Schwab’s net revenue and 6.1% at E*Trade.

To be clear, it’s not unheard of for a self-clearing BD to be so reliant on one source of revenue. More than 60% of Schwab’s revenue comes from net interest on cash, which has been sensitive to recent Fed cuts, according to its last 10-K.

But PFOF is particularly controversial. It doesn’t help that trade execution is as complicated as it is -- and largely invisible to investors. Read more here: https://www.bloomberg.com/news/articles/2018-10-15/robinhood-gets-almost-half-its-revenue-in-controversial-bargain-with-high-speed-traders

The GameStop trading restrictions stemmed from the settlement process. But the conspiracy theories that followed stemmed from trade execution. I think it's good to understand how both settlement and execution work. I’m glad we’re talking about both right now.

Though... Conversations could be more productive with less yelling and rambling, and perhaps a little more time than 5-minute increments to address (and really try to understand) some of these hyper-complex issues. THE END.