Vlad Tenev ought to be penning a very nicely worded thank-you card to SEC Chair Gary Gensler. The commission is throwing Tenev and his fellow Robinhoodies a much needed lifeline with its decision to not ban payment for order flow, the contentious practice brokerages like Robinhood rely on to make money, according to a Bloomberg report.
There is, of course, one problem. Payment for order flow as a way of making money relies on, well, flow! Companies need to send trading volume to market makers to receive payment for it. That’s an area where Robinhood has struggled recently as retail trading frenzies have waned amid the market plunge. The company’s trading revenue was down 55% in the June quarter, compared to one year prior.