Robinhood: At a Play Store Near You
blog.robinhood.com
blog.robinhood.com
If you're in Australia and looking for something longer term access to Berkshire Hathaway shares or ETFs https://getfirststep.com is another service too [no individual shares] its more like wealthfront/betterment/acorns.
They fractionalise the investment so you don't need huge amounts which is quite nice.
There's nothing stopping someone from doing long-term investing with ETFs in Robinhood, is there?
Unless you have a gambling addiction, it is hard to get into trouble with a cash account. Margin accounts are another issue, but in the States, "pattern day trading" requires $25k minimum balance to execute more than 4 trades in 5 biz days. That is a pretty effective filter.
I really hope they add IRA support soon.
disclaimer: this is not legal advice
http://www.finra.org/investors/day-trading-margin-requiremen...
>Day trades can occur in a cash account (only) to the extent the trades do not violate the free-riding prohibition of Federal Reserve Board's Regulation T. In general, failing to pay for a security before you sell the security in a cash account violates the free-riding prohibition. If you free-ride, your broker is required to place a 90-day freeze on the account.
Seems like a great app... just have to get some money in there without telling them my bank creds...
Usually, if you have a short post history, and link to a product more than once, it raises alarm. Usually better to put a disclaimer either way: I am not affiliated w this company, just a huge fan of their product.
I guess my TLDR here is that a trading platform's selling point (for the general public) should be tools first, price second; not price first, aesthetics second.
RE: No portfolio/beta analysis - this is a huge problem for me and I can't understand why they would intentionally not build at least a simple portfolio tracker in so you can analyze your investments over time.
I use the app because I don't want to pay the fees, but I've taken to tracking investments in excel which is annoying when it would be pretty trivial to add functionality to the app.
As for your response to the short-term trading concerns. Transfer restrictions don't really matter here. I can still buy/sell stocks as much as I want. I don't have to cash out to my bank in order to trade SPY 10 times a day.
Say you have 10k of settled funds in your account. You can make a total of 10 $1k trades of SPY throughout the day, or 100 $100 trades. Your account is effectively frozen for the next 3 days as the trades "settle" and you are unable to do anything with them. So you would have needed to cash out of your bank 3 days prior to have active funds ready to go for the next day.
AKA Robinhood gets 2-3 days to earn interest on your unsettled/uninvested funds.
But to be fair, they do advertise themselves as a platform for active traders, and the monthly minimums can be waived with a large enough account. I don't qualify for the latter yet, but once I do I'll probably switch over to IB if Robinhood isn't in Canada by then (You can't really beat free).
No matter how successful they're, I'd argue that it is a drop in the bucket compared to high-frequency trading. I cannot see it hurting the markets.
> Also, the only real reason a commission-free account would be helpful is if you're trading pretty frequently or in very small amounts.
Why? It saves you $10 even if you only trade once every year. It is MORE helpful with many trades, but it is helpful regardless.
> pay $10/trade [..] and have access to some mediocre portfolio analysis, risk analysis, and research tools
Why can't people get these from third parties? A lot of other services provide these tools and information. This de-couples the bundling and allows people to shop around.
That being said, I can see that the lack of features might be discouraging for people who want to run a more complex portfolio of options or require a feature like a rudimentary asset allocation model.
The potential here really seems to be for people who hold well-researched single names regularly, mixed with some index ETFs.
But why such a user hostile interface? It's almost as if this thing is made for a techcrunch press release rather than actual use. When signing up, I can't tilt the screen into "I have big thumbs" mode. And mobile-only trading - no webapp. It also only asks me to type my password once on my mobile device, with my fat thumbs. I'm sure that this sounds great to a techcrunch journalist who only has a 401k - "mobile trading for the flexible millenial workforce" - but it's pretty terrible for anyone who actually wants to make real trades.
Also simply lovely; I look at a stock chart in the mobile app, and I can't see data older than 1 year. The default is 1 day. But I can watch SPY's last price ticking up and down in realtime, woot! I'm sure I'll also get push notifications for trades. (Disclaimer: I haven't tried to trade yet).
I really hope this is a "lean startup" only beta and will be rapidly improved. Right now, the price tag is the only good thing about it.
Kind of an interesting biz model.
I find it highly unlikely that almost anyone should trade anything frequently, even in the weirder corners of their portfolio.
Edit: As of July, they still do not: https://support.robinhood.com/hc/en-us/articles/203583765-Br....
Also how legal is this company? I've read about small StartUps based on the stock market who then wind up getting in trouble with the FTC.
Honestly if this is free investment, then I might start doing some micro-investment. I am been put off the stock market by the overheads of investing/de-vesting (e.g. $20/trade). Although the hassle of filing taxes might still put me off.
The one's I've seen get in trouble have been in trouble with the SEC rather than the FTC.