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Chuck Mustang

07/21/23 11:21 AM

#12310 RE: HigherStandard #12309

The reason Robinhood can offer commission free trading is because they make their money of what is called securities lending, they lend out the stock there client buys to other brokers for a fee to cover short positions. Its a huge business with brokers charging in some cases over 200% of a stocks market value where the short interest is high. Some brokers, such as eTrade and Interactive Brokers will actually pay you a percentage of whatever they make on lending your stock, in some cases you can also dissallow the lending of anything in your portfolio.

Sadly, those rules don't really apply in the OTC as no one monitors or cares, and typically where a company is diluting the MM's know they can cover should they need to.