Robinhood App Review – Free Stock Trading
Isn't it always interesting to discover and to check a new broker and to find out if the offered service is different from the service of the competitors?
Yes, too many of them seem to be far too much alike and sometimes it is hard to find significant differences.
But when I read that there is somebody advertising with a slogan saying that we can step into the future of trading to stay on top of our portfolio anywhere and anytime – and this even without any commissions -, this made me really curious.
Of course my very first thought was:
This sounds far too good to be true.
There must be a hidden trap.
But I found out that the Robinhood App is outstandingly successful in the United States and I couldn't imagine that so many users are making the wrong choice.
So, I decided to check this out for you and to write this Robinhood App Review to share the information I got.
If you also started to be curious, continue reading here and enjoy it!
Is Robinhood truly keeping the promise?
What is Robinhood and why is the Robinhood App special and different?
Basically, Robinhood was launched with the idea that all of the innovations of modern technology should also make it possible to take brokerage to a brand-new level with much less officialdom, efforts and costs.
This makes perfect sense.
Why should a lot of people go on doing the work that technology can do for them?
And if there are less people doing less, the brokerage costs may be cut significantly at the same time. So far, so well.
Just as always, I got my very first impression with my first look at the Robinhood website and I can tell you, this looks absolutely great and just as modern and as innovative as the promises they make.
Never ever before I have seen a brokerage platform that was not totally overloaded on the opening page.
Usually, I feel a little overwhelmed when I enter a new platform, but here I only found the basic, most significant information to get even more curious – and this in a modern, fancy and well structured layout.
In my opinion it looks as if they really don't need to hide anything inside of too much information.
But back to Robinhood itself.
This stock brokerage presents itself as a business with a mission – the mission that everybody should have access to the financial markets for free and that this should, hopefully, encourage and inspire the next generation of investors.
Robinhood gives everybody the opportunity to buy and to sell U.S, listed stocks and ETFs with no commission at all – really!
Just a little later I will explain how this is possible, but first I want to add a few more words about the company.
Everything started at the Stanford University about ten years ago when the co-founders of Robinhood, Vlad Tenev and Baiju Bhatt, were students.
Since they were roommates, they had a lot of chances for endless discussions about their vision.
From there, they went to Wall Street to build their own company and trading platform.
The basic idea was surprisingly simple.
Electronic trading platforms don't have to pay anything to place trades while most of competitors still take a lot of charges from the investors.
Time has stood still there as these charges are remains of the time before the internet era.
But Vlad Tenev and Baiju Bhatt decided to share the advantages of our time with everyone to offer a cost efficient brokerage to enjoy.
Now you may ask for the reason why nobody else ever started doing this before.
I did so too, but we know that we use to ask this question every time a significant innovation enters the market.
So, what's the secret? How can the owners of Robinhood do this?
Who pays for their living?
I also wanted to understand this and so, I went on investigating. Go on reading and I will reveal the secret for you.
Robinhood App – What do they offer and how do they handle it?
I guess, before we may talk about services and prices, it is time to explain how Robinhood may handle the platform without asking for commissions.
Well, the company is as efficient as the website that makes it so unusually easy to navigate and to find everything you are looking for.
By cutting out the manual account management, lots of storefront locations and expensive advertising, Robinhood keeps the costs amazingly low, maybe lower than all of the competitors.
The secret of commission free trading with Robinhood App - Revealed
Believe it or not, trading with the Robinhood App is truly commission free. But of course even the company with the lowest costs of all has to make some money.
So, they are charging their customers for only one of their products called Robinhood Gold.
This service gives their subscribers twice their buying power and full access to trading after the regular hours.
This costs $ 6 per month. In addition to the money Robinhood gets for this one special service, the company earns some more by collecting interest on the money and securities of their clients in the Robinhood accounts. Yes, you are right.
By doing this, they do exactly the same as every bank does with cash deposits. I think, if Robinhood does the same, this is only fair.
Robinhood App – Services, Accounts and Fees
The very first thing you get when you sign in to Robinhood App is a standard Robinhood account. This gives you access to an instant settlement and deposits.
All at once you can start trading with up to $ 1.000 of your deposit.
This basic account is a limited margin account that allows Robinhood to credit your account during the three days of the settlement – with the amount of your stock sale during this time.
Just like with every other limited margin account, you will have to follow the rules of margin account regulations when you use Robinhood and when you are day trading.
However, when you compare this basic account with other margin accounts, you will see that you are not able to borrow more money than you have deposited in your account and you are not able to sell stocks you don't own.
On the other side, this means that you cannot lose more than the amount of your account balance.
Robinhood App plans to offer more options in the future, but this still needs upgrades that are not done yet.
Beside this, you have the option to sign in to Robinhood Gold , the completely leveraged margin account that I mentioned above.
This will cost $ 6 per month, but except of this, there are no fees to be mentioned.
Once you signed in, you also have the opportunity to downgrade to a cash account that doesn't grant instant settlements and deposits.
This downgrade is just as easy as everything else.
Just open your app and your account, go to day trade settings and choose the option to turn off instant settlement.
As soon as it will be confirmed that you have no unsettled funds and no pending transactions, the change will be proceeded fast and without any problems.
Beside the options mentioned above, Robinhood plans also to support trust, custodial, joint and IRA accounts soon.
It may be hard to believe, but the regular Robinhood instant service is truly free as it is the company's philosophy to give all kinds of investors – beginners and professionals – the same chances.
There are no trading commissions, no interest charges, no account minimums, no subscription or maintenance fees and no charges for upgrades.
So, when you ask for Robinhood fees, I cannot mention any as they simply don't exist.
On the platform you will find clear and detailed explanations how to sign in, how to open an account and how to initiate a deposit.
All this is easy and understandable – and here you go, day trading with Robinhood App, in the way of modern times, where ever you are and whenever you want.
If you may still have questions, just contact the Robinhood help center, use the detailed FAQ section that contains a lot of useful information that may already answer your questions or go to the impressing blog starting with “Two Million Thanks”.
Yes, since the beginning in 2015, Robinhood already gained two million users who have transacted more than $ 50 billion so far.
And don't forget it that while doing this, they saved almost half a billion dollars by paying no commission fees.
Two million users can't be wrong and there seem to be a lot of good reasons why Robinhood is the fastest growing brokerage that ever existed.
Robinhood App – Safety and Execution
As an SEC registered broker-dealer, Robinhood is a member of the FINRA (Financial Industry Regulatory Authority) and the SIPC (Securities Investor Protection Corporation).
This means that the users are protected up to $ 500,000 including $ 250,000 for claims for cash.
All your personal information is completely encrypted and safely stored.
Robinhood uses state-of-the-art security means for this and you are encouraged to ask for details.
Regarding the trade execution, Robinhood promises to work with excellent, advanced trading systems that are also used by some of the biggest financial institutions in the world.
Robinhood understands that in the stock market less than a second may make the difference between profit or loss.
The best trade ideas sometimes cross your mind being away from your trading-PC. With robinhood's trading app, its not a problem anymore.
So, it is promised that you will not lose any precious time.
Beside all this, the servers of Robinhood stream the market data in real time.
So, you will be provided with real-time data without any delay quotes – for free.
And in addition, you will always be notified of scheduled events in advance, like e.g. about dividends, earnings or splits.
You will always have up-to-date information at the perfect time.
And last, but not least, Robinhood's free stock trading goes on expanding internationally.
Go to the platform if you want to get to know more about this.
Robinhood App – 6 Top Advantages
- no trading commissions, no interest charges, no account minimums, no subscription or maintenance fees and no charges for upgrades – six big advantages in one line!
- fast and easy mobile trading where ever you are and whenever you want
- trustworthy safety and protection with Robinhood being a member of the FINRA and the SIPC
- guaranteed fast execution
- real time data and information – for free
- a perfectly organized platform that makes it easy to navigate, to understand and to act
The downside of Robinhood's mobile app
- Mobile trading is not fast enough for active day trading
- Only basic functionalities compared to other brokerage platforms (e.g. no Level 2)
- No stock screener included, only trade execution
- Its free (yes, this is also a downside)
Robinhood App – My personal summary
Everything you read Robinhood's website makes perfect sense and the platform is not overloaded with useless information that confuses more than it explains.
It really impressed me in a positive way.
Remember, this app is for free.
Instead of repeating it all over again, I simply suggest: Check this out yourself: https://www.robinhood.com
Robinhood App – Pros and cons
Usually, I finish every review with a short list of pros and cons to make it easier for you to decide if you want to have a try with this platform.
In this case, I have to admit that I have to break my own rule as I just can't give you this overview.
Regarding the pros, I could only repeat the advantages I mentioned above – and I could still add some more.
Regarding the cons, I could probably mention that the international expansion is not finished yet, along with the biggest disadvantage - Robinhood is not being made for active day trading (no level 2, no stock screener, max. 2x leverage, only on mobile, no hotkeys etc.).
In the end of this review I can only recommend you decide first what and how to trade. The online broker selection is the last step before trading live and maybe for a living.