Key Points

CBOE reported strong earnings, highlighting record transaction volume as a key driver.
Robinhood and IBKR both benefit from more active trading environments.
IBKR is generating more interest income right now, but Robinhood's subscription model should not be overlooked.
10 stocks we like better than Robinhood Markets

CBOE Global Markets (NYSEMKT: CBOE) posted record revenues in the second quarter of 2026, rising 25 percent from the prior year. Earnings climbed 50 percent. Record trading volume served as a primary factor. That strength benefits CBOE, and the same market enthusiasm has supported discount brokers Robinhood (NASDAQ: HOOD) and Interactive Brokers (NASDAQ: IBKR).

Still, these discount brokers follow distinct business paths. A central difference may influence which broker investors select.

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Direct competitors with slightly different models

Robinhood and Interactive Brokers compete directly yet target separate market segments. Robinhood seeks newer investors, while Interactive Brokers focuses on seasoned traders. Each firm performs well amid a sustained bull market and growing opportunities in areas such as cryptocurrencies and prediction markets.

Robinhood recorded a 44 percent year-over-year rise in transaction-based revenues during the second quarter of 2026. Interactive Brokers saw commission revenues increase 30 percent. The gap aligns with Robinhood's younger client base, which tends to trade more actively and engage with emerging themes like prediction markets. A clearer distinction appears when reviewing other revenue streams.

Robinhood's interest income grew 9 percent year over year, and its other income rose 54 percent. Other income includes revenue from its Gold subscriptions. Interactive Brokers' interest income advanced 23 percent, while its other income climbed 40 percent. Interactive Brokers lacks a comparable subscription offering yet earns more from interest through margin support and competitive rates on cash balances. Robinhood posted interest income of 389 million dollars, versus roughly 1.06 billion dollars at Interactive Brokers.

The implications of the model differences

Margin loans and cash balances currently lift Interactive Brokers' results. A potential drawback exists if a bear market prompts clients to cut margin debt through voluntary action or margin calls. Interest income would then decline, amplifying pressure if trading volumes also fall and reduce transaction revenue.

Robinhood would face similar volume-related challenges. Its subscription service, however, could stabilize revenue in the other category. Subscription income tends to hold steady. During a downturn, this feature may render Robinhood's operations more stable than those of Interactive Brokers.

A risk remains that newer investors targeted by Robinhood may exit the market entirely. Gold subscriptions likely appeal more to experienced users who are inclined to remain active through market weakness.

Which model wins?

No severe bear market has occurred since the Great Recession, making direct comparisons difficult. Interactive Brokers went public in 2007 near the start of that downturn, while Robinhood completed its IPO in 2021. These timelines limit the usefulness of that period as a benchmark, unlike a peer such as Charles Schwab, which has maintained a public listing for far longer.

Interactive Brokers' approach will likely produce greater swings in financial performance. Strong years may prove exceptional, while weak years could prove severe as both transaction and interest revenues contract together. For some investors, Robinhood's subscription efforts may appear more appealing, even though that revenue stream has not yet faced a prolonged and deep market decline.

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Charles Schwab is an advertising partner of Motley Fool Money. Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Interactive Brokers Group. The Motley Fool recommends Cboe Global Markets and Charles Schwab and recommends the following options: long January 2027 43.75 calls on Interactive Brokers Group, short January 2027 46.25 calls on Interactive Brokers Group, and short September 2026 95 calls on Charles Schwab. The Motley Fool has a disclosure policy.

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