Robinhood has a smaller loss because higher interest rates make margin trading more profitable.

On Wednesday, Robinhood Inc. reported a quarterly loss that was smaller than expected. This is because the brokerage’s margin trading business did well when interest rates went up, and its equity and options businesses did well when market volatility went up.

During the third quarter, net interest income doubled to $128 million as annual margin interest rates jumped to 5.75 percent for Robinhood (NASDAQ:HOOD) Gold customers and 9.75 percent for other customers.

Robinhood Gold is a paid service that gives investors access to the company’s best features.

On a call after the earnings report, Chief Financial Officer Jason Warnick said, “We expect net interest revenues for Q4 to be up by about $25 million from Q3.”

As investors changed their portfolios to take advantage of rising interest rates, trading in options went up by 10% and trading in stocks went up by 7%.

Because of these things, the company made $361 million in revenue in the three months that ended in September, which was well above the estimates of $355 million. At the same time, its net loss shrank from $1.32 billion a year earlier to $175 million.

After taking out one-time costs, Robinhood reported a loss of 20 cents per share, which is less than the 31 cents that analysts had predicted.

Trading in cryptocurrencies, on the other hand, dropped by 12% from one month to the next, to $51 million, as investors stayed away from other risky assets because of a market crash. A year before, it had grown by 860% to $51 million.

“This is better than their competitor Coinbase (NASDAQ:COIN), from which Robinhood has taken market share this year,” said Michael Ganian, an analyst at the research firm YipitData.

The number of people who use the commission-free brokerage every month also went down to 12.2 million.

It had 18.9 million users a year ago, when its easy-to-use interface made it popular with young investors trading cryptocurrencies and stocks like GameStop Corp. (NYSE:GME) from home during the COVID-19 pandemic.