Robinhood Traders Bash the App but Just Can’t Leave It | Hacker News Reader

Robinhood Traders Bash the App but Just Can’t Leave It

bloomberg.com

14 pointsburnaboy9 comments

PSA: If you hold significant amounts of crypto on Robinhood, you're insane. There is no FDIC insurance on it and if RH goes under or even just pulls an "oopsie, we lost your crypto", you are out of luck and will be wiped out.

You can't withdraw to your own wallet, so the only way to withdraw is to convert to fiat and pay federal and state taxes on it to the tune of 15%-30%.

There's a good chance crypto on RH is 0% backed by actual crypto, so another scenario is crypto moons hard and RH just says "we told you this wasn't real crypto (in some small print somewhere) and you invested in it anyway, and now we're insolvent (in crypto only), so you now have nothing".

Same with revolut. These are "scam" crypto accounts. You never actually have any crypto and it exploded there is a possibility that you can't even convert at that rate. I would have a careful look at the user agreement which may even give them to right to convert at any rate of their choosing.

I don't use Robinhood, I use a different broker, but I only use it on the web, not my mobile. Robinhood succeeds now in an industry where everyone offers free trades but their mobile app is more new-user friendly. I guess my point is that this data doesn't tell the whole story. People switching from Robinhood are necessarily going to the app version of another broker.

It also doesn't tell the whole story of people leaving, only people joining. I don't know, just seems like a really incomplete data set to make many judgements from.

However Robinhood customer base has also survived 2 consecutive leap years where their app malfunctioned on those leap days so I think it's fairly resilient.

Wouldn’t it make sense for folks to distribute their cash among 2+ companies for investing? Also, many have zero fees, so what’s the benefit Robinhood has over the others?

Robinhoods benifits is abstracting everything away so that it is very easy and straightforward to trade stocks and options on margin without having any idea about what's going on under the hood. It's not the only company doing that, though, webull is also really simple.

M1 Finance is another one. You don't need to trade at all. You just set your target allocation as percentages ("slices" of a "pie"), and M1 triggers the necessary buys and sells, which are also done as synthetic fractions of shares. It's all executed as market orders; you never see the trading.

I don't use M1, but I think it's a much better model when you just want to manage something like a three-fund portfolio. This is how employer plans like 401(k)s work, after all. You set the target allocation and all the trading and rebalancing happens behind the scenes.

Traditional brokerages like Schwab and Fidelity are really behind here in terms of UI. There's no technical reason not to offer a UI to automate target allocation.

That does sound like a really interesting approach, sounds really cool. I have a feeling alot of the people on apps like robinhood are less interested in serious long term investment vs speculating short term, though. Or at least alot of the new people are.

That's what I do, my IRA is via TDAmeritrade which is mostly just a S&P Index fund, and then Robinhood is where I stick my "Loadsamoney" that I'm actually at risk of moving around sooner than the next 6 months.

Robinhood had a huge week last week in customer acquisition and most of those customers weren’t trading GME.

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