Robinhood knows exactly what it's doing. They are democratizing options trading, which allows market makers like Citadel and G1X to collect premiums on a larger universe of assets with high volatility and large spreads.

A portion of the profits these market makers collect are rebated to RH, which, alongside cash sweep and RH Gold, comprise the bulk of their revenue.

RH makes money by keeping trade volumes and user engagement high. They don't care if you make or lose money on their platform, as long as the trades keep happening.