Robinhood Trade Activity Tops Charles Schwab, TD Ameritrade

Need to Know

• Robinhood, the day-trading fintech, published monthly trading data for the first time this week, reporting 4.3 million daily average revenue trades (DARTs) per day.
• Robinhood’s DARTs for Q2 were more than twice as many as the company saw for the previous three months.
• The fintech signed up three million new customers since the start of 2020.
• Robinhood recently restricted which customer data it would make public on its website, including how many individuals were holding a particular stock

Analysis

The popular fintech trading platform Robinhood published its monthly trading data for the first time on Monday, outpacing its rivals by a substantial margin with 4.3 million daily average revenue trades (DARTs) for the month of June.

Robinhood, which promotes itself as an accessible trading platform even for those who are not well-versed in stock trading, surpassed all its major brokerage competitors in June. This included TD Ameritrade, which came in second with 3.84 million DARTs; Interactive Brokers, with 1.8 million DARTs; Charles Schwab, with 1.8 million DARTs; and E-Trade, with 1.1 million DARTs.

The company’s number of DARTs for Q2 of 2020 were triple the amount it saw in the three months prior.

Robinhood’s disclosure came just days after the company announced it would be stripping some customer data from its website, including information regarding how many clients hold any one particular stock. The company claims such numbers are often misinterpreted or misconstrued: “When we look at customer behaviour over time, many Robinhood customers use a ‘buy and hold’ strategy,” a Robinhood spokesperson said, adding that most customers “buy more stocks than they sell.” The company is also restricting access to its API.

It has been a significant year of gains for Robinhood, which gained three million new customers since the start of 2020. In May, the company raised $280-million in Series F funding, pushing its overall valuation to $8.3-billion. In March, Robinhood reported $60-million in revenue, three times the amount it earned a month prior, in a month that also saw three significant outages.

The Robinhood app is a free stock trading tool, and users pay no commissions on trades. It includes a news feed that allows users to see updates on the companies that they’re monitoring, and those in which they’ve invested. The company also allows users to buy and sell cryptocurrencies and recently launched fractional trading, plus a feature called Cash Management, which allows customers to earn 2.05% APY interest on uninvested money in their account, and spend it through a special debit card.