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How Does Investment Startup Robinhood Make Money?

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If you are an avid follower of news on the social media platform Twitter, chances are you might have read about GameStop and how a group of Redditors took on Wall Street hedge fund billionaires.  It all started when a Reddit user found Melvin Capital, a hedge fund company was shorting the GameStop stocks.  An analogy would be if a person x wants to buy 5 bananas which are being sold at INR 10 in the market,  and another person y already purchased 5 bananas.  X could borrow y’s bananas for a while and sell them with the hope the price will go down below INR 10.  Then x will purchase 5 bananas for a lesser price than INR 10 and give back the bananas to y thereby making a profit, in the difference of buying price.  A group of Redditers noticed what hedge funds were doing with GameStop stock and decided to buy all the available shares in the market which in turn led to stock value soaring through the roof.  Now imagine the bananas as GameStop stock and x is the hedge fund.  Now hedge funds have to return the borrowed shares but since they already sold, they had to buy it for a larger price than they hoped.  This in turn led to more than $ 5 billion in losses for hedge funds because they were shorting the GameStop stock.  

However, Robinhood, the zero commission investment and trading startup found itself in the midst of the storm.  This is because thousands of normal small investors wanted to purchase the GameStop stock and they did it via Robinhood.  Wall Street was not happy with the way a group of Redditors held hedge funds by their collars and lobbied to have the stocks delisted.

Mounting pressure from the Government and Wall Street forced Robinhood to delist GameStop, AMC and Nokia stocks from their trading roster which in turn led to huge customer backlash and lakhs of 1 star reviews on app stores of Apple and Android.  

Background

Robinhood was founded by Stanford University graduates Baiju Bhatt and Vlad Tenev co-founded the company in 2013, with the aim of democratizing finance and making it more accessible to young and less affluent investors.  This was due to trading being carried on commission based platforms like ETrade and TD Ameritrade and by a very small set of people. What made the app so attractive to the normal public was the ease of using the platform and its zero commission slogan.   More importantly, Robinhood made the appeal of trading fun and interactive for the general public and the working class.  Investment applications normally charge a nominal fee or commission on the execution of any successful trade.

However, the app gained huge traction in 2019 just when the COVID-19 pandemic hit the world.  Stock markets crashed suddenly, wiping out billions of dollars in investor wealth.  However, this phase saw the rise of a new kind of investor.  Americans were given $ 1200 stimulus cheques to protect them from the economic fallout of COVID-19 pandemic.  Armed with these cheques, millions of trading novices began investing in the stock market via Robinhood.  

ALSO READ: How Does WhatsApp Generate Revenue

Revenue model

How does a startup which calls itself a zero commission brokerage earn revenue and manage to be profitable?  Robinhood was designed to make profits by selling the customer trading data to several investment firms on Wall Street.  This practice is known as high volume order flow.  In financial markets, payment for order flow refers to the compensation that a broker receives, not from its client, but from a third party that wants to influence how the broker routes client orders for fulfillment.  It is not illegal but it is often frowned upon, to use this strategy as it is also called a ‘kickback.’   This accounts for a lion’s share of revenue for Robinhood.

The second revenue generator is through interests.  Robinhood makes money from interest made by lending out investor’s idle cash.  Robinhood lends out uninvested cash sitting idle in customer accounts.

The third revenue generator is Robinhood Gold, the company’s premium account, allows investors up to $1000 of margin thereby allowing them to trade with more than they have in their cash balance on the app. 

While Robinhood has been caught in the middle of a nasty war between Wall Street and retail investors, there is no denying the fact that it changed the way people invest in the stock market.  

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How To

WhatsApp’s Secret Code for Locked Chats: How to Use It for Extra Privacy!

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WhatsApp's Secret Code for Locked Chats: How to Use It for Extra Privacy

WhatsApp has introduced an innovative security feature known as Chat Lock, which enhances user privacy by allowing individuals to secure their personal chats from unwanted access. A key component of this update is the Secret Code option, enabling users to access locked chats through a unique code, thereby making private conversations even more discreet.

What is the Secret Code for Locked Chats?

The Secret Code feature allows users to set a custom code for their locked chats, effectively hiding them and making them accessible only through a specific search command. Instead of simply navigating to the Locked Chats folder within the app, users can assign a custom name or code that conceals these chats entirely from the main chat screen.

Once the Secret Code is established, users can easily search for it within the app to access their hidden chats. If someone attempts to enter an incorrect code, the locked chats will remain invisible, adding an extra layer of security.

Steps to Set Up a Secret Code for Locked Chats on WhatsApp

If you want to enhance the security of your chats with a Secret Code, follow this step-by-step guide:

  • Lock Your Chats:
      • Select the chat you wish to lock.
      • Tap the three dots in the top-right corner and choose Lock Chat.
  • Access the Locked Chats Folder:
      • After locking some chats, open WhatsApp and navigate to the Locked Chats folder.
  • Set the Secret Code:
      • Tap the three dots in the top-right corner of the Locked Chats screen and select Chat Lock Settings.
      • Choose the Secret Code option.
      • Enter a memorable code of your choice (this can include words or emojis).
      • Tap Next, re-enter your code to confirm, and then tap Done to save your code.
  • Hide Locked Chats:
    • To make locked chats less visible, go back to the Chat Lock Settings page and toggle on Hide Locked Chats.

Important Considerations

  • Code Access: After setting up your Secret Code, you will need to enter it each time you want to access your hidden chats.
  • Privacy Caution: If someone knows your Secret Code, they can unlock your chats.
  • Code Retrieval: If you forget your Secret Code, there is no recovery option unless you have a backup of your chats.

Benefits of Using the Secret Code Feature

The introduction of the Secret Code significantly enhances privacy for WhatsApp users. It allows individuals to keep sensitive conversations hidden from prying eyes, making it particularly useful for those who share their devices or are concerned about unauthorized access. This feature is ideal for various scenarios, such as discussing personal matters or planning surprises without fear of being discovered.

Conclusion

With its new Secret Code feature for locked chats, WhatsApp has taken a significant step toward enhancing user privacy and security. By allowing users to hide their sensitive conversations behind a customizable code, WhatsApp provides an effective solution for those looking to keep their communications confidential. As digital privacy becomes increasingly important, features like these empower users to take control over their personal information and interactions within the app.

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How to Make ChatGPT Your Default Search Engine and Say Goodbye to Google!

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How to Make ChatGPT Your Default Search Engine and Say Goodbye to Google!

If you’re ready to break free from Google’s two-decade reign in the search engine market, there’s an exciting new alternative: ChatGPT. OpenAI has introduced a web search feature in ChatGPT, positioning it as a robust competitor alongside established players like Bing and Microsoft’s AI-enhanced search tools. Here’s how you can set ChatGPT as your default search engine and explore its capabilities.

Setting ChatGPT as Your Default Search Engine

You can easily set ChatGPT as the default search engine on any Chromium-based browser that supports Chrome Web Store extensions. This includes popular browsers like Google Chrome, Microsoft Edge, Brave, and Opera. To enable ChatGPT Search as your primary search engine, follow these steps:

  • Install the ChatGPT Search Extension:
      • Go to the Chrome Web Store in your browser and search for the ChatGPT Search extension. Alternatively, you can use a direct link to the extension.
      • Click on “Add to Chrome” or “Add to [Your Browser]” to install the extension.
      • Ensure the extension is activated by checking under the “Extensions” tab in your browser settings.
  • Pin the Extension:
    • To prevent the extension from being automatically disabled by your browser, consider adding it to your favorites tray for easy access.

Limitations and Availability

Currently, the ChatGPT Search feature is available only for OpenAI’s Plus and Team subscribers, with plans to extend access to Enterprise and Education accounts soon. Free users will gain access eventually, although OpenAI has not specified a date. Users who joined the waitlist for the prototype, SearchGPT, should have access to ChatGPT’s search capabilities without needing a subscription.

This new AI-powered search feature enhances natural language understanding, allowing users to interact with ChatGPT as their default search engine and experience a fresh, conversational approach to web browsing.

Benefits of Using ChatGPT as Your Search Engine

By setting ChatGPT as your default search engine, you can enjoy several advantages:

  • Conversational Queries: You can ask questions in a more natural way, and ChatGPT can respond with information sourced from the web.
  • Contextual Understanding: The AI takes into account the full context of your queries, providing more relevant answers based on previous interactions.
  • Up-to-Date Information: ChatGPT integrates real-time data from various sources, including news articles and statistics, enhancing the relevance of its responses.
  • No Ads: Unlike traditional search engines that often display ads alongside results, ChatGPT offers an ad-free experience.

Expanded Device Compatibility and Access

The upgraded ChatGPT Search will also be accessible on other devices through compatible browsers. Users can expect consistent functionality across their devices by logging into their OpenAI accounts.

Conclusion

Making ChatGPT your default search engine is a straightforward process that opens up a new world of possibilities for how you interact with information online. With its conversational capabilities and advanced AI features, ChatGPT promises to deliver a more engaging and efficient search experience than traditional engines like Google. As you explore this innovative tool, you’ll not only enhance your browsing experience but also contribute to the growing shift towards AI-driven solutions in everyday tasks.

If you’re ready for a change, follow the steps above and say goodbye to Google—ChatGPT is here to redefine how you search!

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How to Create a Two-Sided Dynamic Profile Picture on Instagram: Show Off Your Photo and Animated Avatar!

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Looking to add more personality to your Instagram profile picture? Now, you can create a dynamic profile that seamlessly displays both your static profile photo and a custom animated avatar—perfect for sharing a bit more of your personality.

Instagram’s dynamic profile picture feature, launched in January 2023, combines your standard profile photo with a customizable animated avatar. This allows followers to flip between your static image and your animated self-portrait with a simple swipe. If you’re not familiar with avatars on Instagram, they were first introduced in early 2022 for Stories and messages and are now available for profile pictures.

Customizing Your Avatar

Instagram’s animated avatars are customizable, similar to Apple’s Memoji and Samsung’s AR Emoji, with no fixed gender settings. You can personalize various features to match your style. Avatars are public by default, but privacy settings allow you to control who can see them.

Step-by-Step Guide to Setting Up Your Dynamic Profile Picture

Step 1: Start Creating Your Avatar

  1. Ensure you have the latest version of Instagram on your Android or iOS device.
  2. Go to your profile page and tap “Edit Profile.”
  3. If you haven’t created an avatar before, you may see a prompt inviting you to “Create Your Avatar.” Select it, or tap “Edit picture or avatar” to get started.

Step 2: Customize Your Avatar

  1. Begin by selecting a skin tone, then dive into customizations such as hairstyle, face shape, and outfit.
  2. The options are extensive, allowing adjustments from facial features to makeup, accessories, and body type.
  3. Use a two-finger pinch to zoom in or rotate the avatar with a swipe for better detail viewing.
  4. For more personalization options, select “More Personalization” for finer adjustments like brows, lashes, and facial hair.
  5. Instagram includes a virtual store for additional personal touches; once satisfied, tap “Save” to finish your avatar.

Note: If your Instagram is synced with Facebook, it will offer the option to “Sync” avatars across both platforms.

Step 3: Add the Avatar to Your Profile Picture

  1. Head back to the “Edit Profile” page.
  2. Instagram may prompt you to “Enhance your profile picture with your avatar.” If not, select your avatar and enable the “Add to profile picture” option.
  3. This action combines your profile photo and avatar into a double-sided profile picture that followers can swipe to see both versions.

Step 4: Personalize Background and Pose (Optional)

  1. To add final touches, adjust the avatar’s background color and choose from various poses for a more personal look.
  2. Swipe to show the avatar on the “Edit Profile” screen, tap to adjust, and select your preferred background and pose options.

If you ever want to remove the avatar, use the ellipsis (•••) menu in the profile editor to hide it.

Conclusion

Creating a dynamic profile picture on Instagram allows you to showcase both your static image and animated avatar, adding depth and personality to your online presence. This feature not only enhances user engagement but also provides an innovative way for individuals to express themselves creatively.

As this feature becomes more widely adopted, it will be interesting to see how users leverage it for personal branding and community interaction on the platform. By following these steps, you can easily set up your own dynamic profile picture and make your Instagram account stand out!

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