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yskchu

> Probably a good time to mention this* excellent piece on how they make money.

> In short: it’s interest on cash deposits. Not payment for order flow.

Are you sure Schwab don't sell order flow?

"Order flow revenue was $139 million during 2018, $114 million for 2017, and $103 million in 2016."

https://content.schwab.com/web/retail/public/about-schwab/sc...

The one broker that is clear that that doesn't sell order flow is Interactive Brokers

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The point is that while of course they do make money from order flow, it's usually actually a small part of their revenue. Most of the revenue comes from interest on cash deposits (and other things), so even dropping trade commissions to zero won't materially reduce their profits.

Schwab's total 2018 revenue was over $10B; I expect they're more worried about losing potential and existing customers to the likes of RobinHood than they are about 1% of that revenue.

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