Like several other app industries, stock trading and investment saw a huge spike in usage during the coronavirus pandemic. Millions of people stuck at home were able to take advantage of new zero-commission mobile apps to trade shares, indexes and options.
Robinhood led the way with zero-commission in the US and has been the lead platform used by those investing in the “meme stocks”, like GameStop and AMC Entertainment. This pattern of investment was followed in other apps, which led to several platforms banning the trading of these stocks.
Larger investment platforms, such as Charles Schwab and E-Trade in the US, have both lowered commissions to better compete with Robinhood. Other features, like fractional shares and interest on balance, have also been added.
In the UK and Europe, several startups such as Trade Republic and Freetrade are attempting to become the European Robinhood, while older platforms like eToro and Plus 500 have lowered their fees to better compete.
Almost all of these zero-commission platforms use a process called payment-for-order-flow (PFOF) to generate income. The process bundles thousands of trades and directs them to a market maker, which will then compensate the stockbroker for it.
This process is controversial, as it was pioneered by Bernie Madoff, responsible for the largest Ponzi scheme in history. However, Robinhood and other operators have said the process allows zero-commission stock trading apps to exist.
In the UK, the process has been banned. Freetrade and other platforms generate most of their income through foreign exchange and premium subscription services. The European Union and US FTC are both looking into PFOF legality.
We are specifically focused on commission-free stock trading, which was pioneered by Robinhood and is now available through a myriad of platforms.
To learn more about the stock trading app market sector, read on below.
Key stock trading statistics
- Stock trading apps generated $22.8 billion revenue in 2021, Robinhood was the best performing zero commission platform
- Over 130 million people used stock trading apps in 2021, a 49% increase on 2020 figures
- Robinhood was valued at over $30 billion in 2021, but has seen its valuation decline to less than $10 billion in 2022
Top stock trading apps
|https://www.businessofapps.com/data/robinhood-statistics/||Robinhood||By far the most popular stock trading app by users, even though total assets are far lower than incumbents like Fidelity and Charles Schwab|
|https://www.businessofapps.com/data/cash-app-statistics/||Cash App||Square added zero-commission stock trading to Cash App in 2020, which is part of the company's aim to become a financial "super app"|
|https://www.businessofapps.com/data/etoro-statistics/||eToro||This stock trading app differentiates itself through the use of social copy features, which let newbies copy experienced traders portfolios|
|https://www.businessofapps.com/data/revolut-statistics/||Revolut||Another finance app which is dedicated to the vision of the "super app", Revolut recently rolled out zero-commission trading in the US|
|https://www.webull.com/introduce||WeBull||A Chinese-backed stock trading app, which has made waves in the US with 13 million registered users and two million monthly actives|
|https://www.plus500.com/en/||Plus500||Israeli-based stockbroker which deals primarily on contracts for difference (CFD), although it has recently added other instruments|
|https://www.trading212.com/||Trading 212||One of the more popular zero-commission stock trading apps in the UK, with 1.2 million active users|
|https://freetrade.io/||Freetrade||Launched in 2018, Freetrade is one of the newer additions to the ecosystem. Borrowing heavily off Robinhood, it also offers an ISA|
|https://traderepublic.com/en-de||Trade Republic||Quickly becoming the most popular stock trading app in Europe, Trade Republic was recently valued at $5.3 billion|
Stock Trading App Revenue
This chart only tracks stock trading revenue, which is derived from trade execution and the various fees stockbrokers attach to it. Savings funds, wealth management and other financial services connected to the stock trading platform are not included.
Stock trading annual app revenues 2016 to 2021 ($bn)
Stock Trading Revenue by App
Robinhood was the lead stock trading app worldwide, generating $1.8 billion revenue in 2021. European stock trading app eToro saw its revenues double in a year.
Stock trading revenues by app 2021 ($mm)
Stock Trading App Users
The number of retail investors using mobile apps has steadily increased, with a surge in 2020 due to the coronavirus pandemic and the rise of meme stocks.
Stock trading annual app users 2016 to 2021 (mm)
Stock Trading Users by App
Robinhood is noticeably ahead in terms of total users, with 16.3 million active users. Block’s Cash App was second place, with an estimated 4.8 million users.
Stock trading users by app 2021 (mm)
Stock Trading App Valuations
We have decided to add the valuations of all companies which receive the majority of their income through stock trading. Robinhood has saw its valuation more than half after IPO.