You acknowledge and agree that Robinhood Financial may receive compensation from market makers and other third parties in connection with the routing of your orders for execution. This practice, known as payment for order flow, may create a conflict of interest in that Robinhood Financial has a financial incentive to route your orders to market makers that pay the most compensation rather than to venues that may provide the best execution for your orders. Robinhood Financial is required to seek best execution for your orders notwithstanding any such compensation arrangements.
Payment for order flow is how Robinhood makes much of its revenue — the 'free' trading model is subsidized by market makers who pay for your order flow, and this may cost you slightly more on each trade than using a broker that routes for pure best execution.
Robinhood's Customer Agreement significantly restricts your legal rights by requiring all disputes — including those involving investment losses — to be resolved through binding arbitration rather than court, and explicitly waives your right to join a class action lawsuit. If you have a margin account, Robinhood can liquidate any of your securities positions without prior notice and can lend your securities to third parties. You can opt out of the arbitration clause by sending written notice to Robinhood within 30 days of account opening, as specified in the agreement.