I don't see it as something they wanted to offer. This is something they had to do to compete with Robinhood. I don't think they are looking at this as a money making affair. OTOH, calling tops & bottoms no one or anything can do
Seems weird. I can’t see any benefit to competing with robinhood. Seems like a lot of work to compete for small accounts that generate more customer service than commissions generated.
Robinhood is currently scooping up all the college kids who'll graduate and get jobs which create serious income. It's smart to secure a business' future.
Those small accounts, at first might be there just for fractional shares, but later on, more often then not, might learn how to trade in 2 weeks, start going short, naked options, futures, margin, 3000 leverage -. all that crazy new noob stuff, and that's a lot of extra cash flow. And ofcourse you have to keep up with the trends/fashions. Like KO response to competition of presenting that new line of sodas (can't remember how are those called, but it ,,much more healthier'') What IB could do, is presenting as simplistic app as RH has. Heard many times : ,,RH is great to use, since it's easy/simple to understand'' Why didn't they bought them out in first place. (maybe they tried, don't know. If not, shortsightedness on growing competition) Like those Ford/BMW/Honda etc, didn't gave enough credit for TSLA, 10 yrs ago. If they would have knew what's coming, they would have taken ~5% positions OTC or after ipo and sit quiet atm, with smiles on their faces.
There’s no loyalty in this business. The moment the smart kids get some money, they will ditch Robinhood. However, until then, all those college kids generate some payment for ordeflow (whether explicitly or implicitly)
Are you kidding? It is the bottom. Cheap shares means more robinhood accounts can buy buy buy with $1200 monthly free money forever
Markets should have supported fractional shares from the start in the interest of equality [ideally, obviously technology was needed]. Don't think it says anything about a top or what not. As for IB competing with RH; it never hurts to foster customer loyalty with someone that might only be small fry today. May well have paid off handsomely in a decade or two or three.
There is demand from advisors who want to purchase a specific dollar amount of shares - especially in the high price stocks you mention.
Competing with that 121trade app, which lets you trade those with $5 accounts. Do they bundle mutliple accounts volume and send to market or assume the traders will likely take a loss and just make a profit from that ??