Sunday, June 1, 2025

Latest

Robinhood’s Preliminary Q2 Orderflow Revenues Suggests Retail Trading Mania May Be Wearing Off

After trading below its offering range since the debut day of its IPO, Robinhood (NASDAQ: HOOD) shares were sent surging on Tuesday, trading at above $46 at the time of writing. However, the rebound may not be a proxy of what’s in store for the discount brokerage, as the trading app’s preliminary revenue figures suggest that the hype surrounding retail trading may eventually fizzle out.

Following a fiery first quarter that saw retail trading boom and subsequently bring in a record $331 million in payment for orderflow (PFOF) for Robinhood of which $198 million of that came directly from Citadel, things no longer appear to be as scorching in the second quarter. In April, Robinhood’s PFOF amounted to only $65.9 million, and slipped even further to a mere $57.4 million in May— the lowest since October 2020. On the other hand, though, the month of June saw a slight recovery, rising to $93.6 million as retail traders momentarily locked their sights on major tech companies, including Apple and Amazon.

When compared on a quarterly basis, the subsiding of the retail trading craze becomes even more evident, as Robinhood’s revenue from PFOF declined 34.4% in the second quarter. Although Robinhood’s main customer is still Citadel, the hedge fund’s total payments made up only 27.6% of the trading app’s entire PFOF, or $81.6 million. Interestingly, it wasn’t just Robinhood that suffered a drop in its PFOF revenue: according to Bloomberg calculations, nearly all brokers suffered some form of PFOF revenue decrease in the second quarter, but Robinhood, of course, took the lead.

Does this mean that Robinhood’s main PFOF contributor, Citadel— which played a significant role in the the trading app’s skyrocketing valuation— is slowing waning from its largest patron of retail trading data? And, if that is the case, can Robinhood derive the foregone revenue elsewhere? Moreover, it is also important to note that the the bulk of retail investors’ funds were the product of generous stimulus payments, so what will happen to the pandemic-fuelled retail trading mania once free money from the government no longer becomes an option?

And, lastly, will Robinhood hand over data to Citadel from retail investors that are buying its own stock in the event of a gamma squeeze? Does this mean that Robinhood has now built an infinite circle of creating revenue each time the company becomes the target of so-called “front-running?”


Information for this briefing was found via Robinhood and Bloomberg. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

One Response

Leave a Reply

Video Articles

Alamos Gold Q1 Earnings: The Inside Scoop

Cerrado Gold Q4 Earnings: The Turnaround is Working

B2GOLD Q1 Earnings: Revenue Up, Production & Cash Flow Decline

Recommended

Canadian Copper: The $172M Combined Strategy PEA

ESGold Begins Concentration Tests Ahead Of First Production

Related News

Robinhood: Adverse Ruling by FINRA Arbitrator Could Have Significant Negative Implications

A well-known axiom in the investing world is that the best time to buy is...

Saturday, January 15, 2022, 09:00:00 AM

Robinhood Sees Operating Metrics Continue To Deteriorate

Last week, Robinhood Markets, Inc. (NASDAQ: HOOD) reported monthly operating data for August 2023 that...

Sunday, September 24, 2023, 07:17:00 AM

FTX: Who Actually Owns The Robinhood Shares?

Details on the recent bankruptcy filing of Sam Bankman-Fried’s FTX Group continue to come out,...

Sunday, November 13, 2022, 09:00:00 AM

Cboe Global Markets In Talks With Robinhood As Potential Equity Partner For Recently Acquired Digital Exchange

Cboe Global Markets, Inc. (Cboe: CBOE) said on Thursday that it has been talking with...

Friday, August 26, 2022, 09:41:33 AM

Robinhood’s Data Breach Could Have Far-Reaching Financial Implications

Robinhood Markets, Inc. (NASDAQ: HOOD) shares have lost roughly half their value since early August....

Thursday, November 25, 2021, 03:33:00 PM