It’s been a while since we wrote about the brokerage firm Robinhood so we wanted to check back in to see how they have been doing.  According to this Business Insider article with their co-founder Baiju Bhatt, business at the zero-commission brokerage firm is booming.  They now sport a $1.3 billion valuation and have over 2 million users and are enjoying  20% growth month over month in their margin loan business. So how does a firm that charges zero for commissions command a $1.3 billion valuation? In addition to the margin business, they receive payment for order flow from market makers on every (more…)

As you all know, stock exchange business models have morphed radically in the last decade. Large portions of their business are bed-rocked in the selling of speed (colocation, data feeds, and data services) – as much as 50%. And as you all know, this morphing has been put in the spotlight with the public’s awakening to the role that high frequency trading plays in our modern equity markets. In the wake of Flash Boys and the arrival of IEX, class action lawsuits have emerged, including the suit against seven stock exchanges along with dark pool operator Barclays. In that suit, (more…)