And probably also a lot on short fees on the securities they lend out. Cheap brokers lend out the securities you own to short sellers, short sellers have to pay interest for such privilege (there's essentially an OTC market for the % rate). Note that this is not much different from earning interest on lending out cash.
Respectable brokers pass at least some of the short fees to the investor. Interactive Brokers, which I use, pays back around 50%.
Respectable brokers pass at least some of the short fees to the investor. Interactive Brokers, which I use, pays back around 50%.