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Strategies & Market Trends : ajtj's Post-Lobotomy Market Charts and Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: ajtj99 who wrote (41793)

11/3/2021 1:37:56 PM

From: sunabeach

1 Recommendation

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ajtj99

Read Replies (1) | Respond to of 97558

Options.

Just getting caught up on days old emails and saw this:-

FINANCIAL SERVICES
Large Firms Rush in After Robinhood's Success in the Options Market

For financial service firm Robinhood, it’s abundantly clear which of its services is the most lucrative.

In its third-quarter earnings call last week, the company reported that options accounted for well over half of its transactional revenue, despite the reality that only 13% of its users trade options. Now, others are looking to cash in on the options craze.
Go With The Flow
Thanks to fruitful payment-for-order-flow agreements with high-speed trading firms such as Citadel and Susquehanna, retail brokerage firms like Robinhood are making a mint on options trading.

According to Bloomberg Intelligence, the 11 largest US retail brokerages collected $2.2 billion selling customers' options orders between July 2020 and June 2021 — that's 60% more than they earned from selling equities orders.

Volume Incoming: And while each order is more lucrative — thanks to "bid-ask spreads" that can be 15 times larger than in the equities market — the number of trades is rising exponentially, too. So far this year, more than 38 million options contracts have traded hands each day, an all-time high.

The end result: Options are a critical piece of Robinhood's business:

•
In its third quarter, the company reported $164 million in revenue from selling options order flow — more than triple what it earned from equities trades.
•
Robinhood's revenue from cryptocurrency trading surged 860% to $51 million.
iStock Nano: Last week, exchange giant Cboe announced its plans to tap the day-trading options markets with the launch of “nano” contracts — giving speculators the chance to participate with less money on the line.

FINANCIAL SERVICES

Large Firms Rush in After Robinhood's Success in the Options Market