Robinhood, Citadel and the importance of Freetrade Plus

Mods please leave this up. Apologies if it’s not the usual content but I think it could present an opportunity for an important discussion.

I know Freetrade Plus has had many positive reviews since launch but I’ve also seen a small cohort questioning the need for a paid tier and saying everything should be completely free.

We don’t yet know the complete story of why Robinhood took the decision to restrict trading on certain stocks today but there is some serious questions about its financial links to Citadel, who were involved the short of $GME. There are reports that Robinhood makes as much as $400m/year from Citadel.

I think what Robinhood users have discovered, to their detriment unfortunately, is that if you’re not paying for the product YOU ARE the product.

This is where I think Freetrade can differentiate themselves. A solid free tier combined with Plus gives Freetrade a path to sustainable, transparent profitability without making its users the product.

I would be very interested to hear the communities thoughts on this topic

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Which is why I invest with FT as they don’t directly or indirectly make their money from their users losing money

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Same can’t be said about T212!! They only make money when you lose. I really do hate them and what they do to people.

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The other thing to mention as well is while not everyone has seen the value in plus for them (which is fine) freetrade have said they don’t plan to change the price as new features are added. Rather than screwing around with prices and changing them every 6 months they’ve just gone with the price it’s going to be.

And the fact is it’s not for everyone and doesn’t need to be.

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This

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Very well said!!!

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Brilliant :+1::+1:

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This is very well said. Completely agree this is what Freetrade needs to politely communicate to the world!!

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I agree, I think they are doing a good job and I expect the Plus offering to only get more compelling.

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It amazes me people want something for free to make them rich. And they feel outraged for asking for a cup of coffee a week for it.

Someone posted 145k profit today and it wasn’t in an isa. Well that decision not to pay 3 quid a month didn’t work did it? Up to 20% cgt due on that 145k

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Is there a difference between the way Freetrade and Trading212 are structured? Freetrade made their own broker service or something. I might be talking complete rubbish

Last year (if i remember right) freetrade moved to their own in house platform, its been working really well imo. Few small hiccups some slow down like today but nothing major and i dont think its ever gone down, even last year when other brokers fell over and even some of the larger brokers struggled this platform still ran. US shares are executed through a US partner but i believe its through the US partner through freetrades platform.

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Have you got a source the $400m figure?

I was thinking if this had some bearing on why T212 went down for some of these shares today and other brokers, did Freetrade as well?

I think this post also sums it up perfectly…

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This is a very important point.

The payment for order flow approach which rakes in millions for Robinhood is a very non-transparent practice which gives users the illusion of a free product.

Freetrade’s transparency with regards to how they monetise their business was one of the big factors that not only made me choose it as the platform for the majority of my investing but also participating in the last Crowdcube round.

This is a company I can get behind. :freetrade:

Keep up the great work all!

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I’m not sure exactly what the source for that figure was, I will find it if I can. I read it today in passing.

This article explains the link between Robinhood and Citadel and how they make money through payment order flow

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Robinhood may have caused themselves some headaches with their approach to the Markets.

https://financialpost.com/pmn/business-pmn/robinhood-draws-on-credit-lines-from-banks-bloomberg-news-2

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Did you consider that person may have a S&S ISA elsewhere?

And also may not have expected their investment to rise as much as it did when it did?

It was likely ARB and that rise in Dec/early Jan was insane; I got caught on the other side of it. I upgraded my account to Plus and transferred my ISA precisely to get in on ARB at 18p and not have to pay CGT, and I missed the boat by 1 day.

So maybe he/she isn’t taking FT for granted as you seem to be implying (and their very grateful post suggests otherwise).

I’ve spotted a few posts by people on this forum who seem to be really irked by FT users who make significant profits without having paid for Plus… I’m guessing these people all have a holding/stake in FT, and want to see evidence of their investment becoming more valuable.

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Interesting Twitch stream where US congresswoman Alexandria Ocasio-Cortez (AOC) talks about Robinhood, Citadel, etc. with a former Wall Street software developer turned activist.

Over an hour long, and I’m currently in minute 20, but I thought some people may find it informative

Twitch

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