I wasn't going to ever make a post on this. because i couldnt care less on what others use as their Broker. nor whether they lose money due to their broker or not. But i decided to make it after the constant misinformation about Robinhood, and the constant recommendation of using RH. Not to mention the users own denial
but i want to be clear, this isnt about what you should invest in. nor a 10k analysis. You can go go long/short on RH, SCHW, etc. idc. this thread is in regards to who you should use as your broker.
im also not going to waste my time elaborating much. as if you cant decipher things I directly point out for you, you deserve to lose money.
im going to compare HOOD vs SCHW using their 2022 10k.
For both, the 10k is for the fiscal year ending DEC 2022.
SCHW Gross Revenue: $20.76b https://imgur.com/a/GBZXlnH
RH Gross Revenue: $1.36b https://imgur.com/a/SAECxrq
For our purpose, gross revenue doesnt matter. they both had a positive revenue source. great.
what to pay attention to is the source of their revenue. looking at the same screenshot, you see.
SCHW: Interest revenue, Asset management/admin fees, trading revenue, bank deposit fees, other
RH: Transaction based revenue, interest revenue, other
out of RH's $1.36b gross revenue, for 3 years straight, their main source of revenue was Transaction based revenue. for 2020, 2021, 2022, respectively, it was 75%, 77%, 60%.
Meanwhile, SCHW doesnt have "transaction based revenue" listed at all. (could be included in "other" though. maybe. but still nowhere near the same ratio as RH)
what does transaction based revenue mean here by RH? Defined by RH https://imgur.com/a/QZYI6KD
They also continue on to elaborate the risks associated to their business. and flat out state it as well.
meaning, their main source of revenue they rely on, is a risk factor.
and worse of all, its literally in their writing explicitly what they do to your trade orders. and how RH makes money.
literally do some reading, and the information you need is there for you on why you shouldnt be using RH if you're serious about investing/trading.
[link] [comments] https://www.reddit.com/r/stocks/comments/1377jtf/robinhood_or_another_brokerage_firm/
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