As you know, Robinhood offers online traders an easy way to invest in stocks like GameStop. But did you know it makes it’s money from PFOP or payment for order flow?
What PFOP means is that Robinhood sells its own customer trading data to outsiders—those more than willing to pay for it. Why you might ask? Follow the money.
A hedge fund might want to know what the order flow looks like on a specific stock and bet for or against it. It’s like sitting at the poker table and they see everyone’s hand. It’s basically a legal way (I guess) to show them the money.
Don’t let that be you. It’s yet another reason why I like doing business with my favored custodian Fidelity Investments. It’s order execution is second to none and it doesn’t sell your order flow to some outside predators. You know the guy looking to take your money, and your house, and move you into a van down by the river!
Read here why Fidelity is #1.
- Do You Know Fidelity’s Best Kept Secret Weapon?
- When Your Survival Guy Joined the Family Business
- GameStop Helps Explain Robinhood’s Free Stock Trades
- Your Retirement Planning Can Feel Like Catching an Airplane
Action Line: Make sure you’re aligned with a big boy brokerage platform like Fidelity’s. As you know, investing isn’t always fun and games.
P.S. Did you know actor/writer Bob Odenkirk, Saul the lawyer in Breaking Bad, wrote this skit “Matt Foley: Van Down by the River” when he worked at SNL?
E.J. Smith - Your Survival Guy
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