Looking for something scary to do during Halloween? Just take a look at Robinhood’s earnings report — filled with deteriorating metrics that sent its stock down 10%.

What’s the big deal? Retail investing is here to stay — except investors are taking their money to another part of the market, exchange-traded funds (ETFs).

Retail investors have moved away from speculative meme stocks and options trading and according to VandaTrack data (via WSJ), since Feb, trading volume on meme stocks dropped nearly 80% with ETF volume nearly doubling.

That’s bad news for Robinhood, who makes 73% of sales from users placing trades.

Investors get tricked: The drop in trading activity was felt in Robinhood’s third-quarter earnings report (Warning: Numbers will spook investors):

• $365M in third-quarter sales — short of the estimated $432M.
• $51M in crypto trading revenue — down 78% from $233M in the second quarter.
• 36% drop in average revenue per user and 2.4M fewer monthly active users.

No one expected the tremendous trading activity during the start of 2021 to stay — but the results were far worse than expected.

Looking forward: Crypto trading volume remains way below their peaks early this year — which could have further impacts on crypto trading apps. But the problems for Robinhood don’t end there.

• Insiders are able to sell another 15% of their shares today — which could send its stock down even further.
• The SEC is looking to change or ban “payment for order flow” — the controversial practice used by Robinhood to offer “commission-free” trades.

This sends a warning to others relying on crypto trading like Coinbase (NASDAQ:COIN) — who’s set to report earnings on November 9.