Commission Free Trading

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Ryan-o

Level 2 Member
Does anyone have further information about robinhood?

From what I can tell it is a commission free brokerage that plans to make money on margin lending. It's mobile only so that's how they plan to keep costs down. Hopefully it won't go the way of Zecco.

What could be the downsides? I can see it being an issue for uniformed investors or people trying to time the market, but for those whose assets are minimal (making the commission fee a larger percentage cost) this could be a big win.
 
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Ryan-o

Level 2 Member
Right now it is invite only. This is my referral link (not sure if I can post?) which supposedly pushes me to the front of the line for priority access. I currently don't have access but if I do gain entry soon, I will report back with more info.
 
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Matt

Matt

Administrator
Staff member
Ryan-o said:
Edited... Thanks didn't think that one through. Operating on minimum sleep
Click to expand...
Actually - you might be close to the truth, I expect that they will make it free to trade and charge a margin to get more suckers in the game.

Regarding links- can you put them in the Conga section? I'm not sure if we have a Robinhood one - am traveling right now and haven't checked.
 
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Ryan-o

Level 2 Member
Ok so here is my update after a few weeks of using it...

  • The platform is mobile only. They do not have a web based option for managing your account or trading
  • No minimum deposit needed to open an account
  • No account maintenance fee
  • Trade commission (buying and selling) is $0
  • Can only trade securities based in the US
  • No support for OTC trades, options, warrants or mutual funds
  • Transfer funds via ACH from your bank for free
  • They make their money by the interest on univested customer cash deposits and interest from margin lending
  • It is a very lean, no frills interface.
  • Currently only available for iOS
  • Divedends are not automatically re-invested
  • They use Apex clearing to process trades
  • Connecting your bank account is pretty straightforward. They allow you to login to your bank using their interface. Not sure how some people feel about this however...
  • Member of FIRNA and SIPC
  • Can do market or limit or limit orders
  • I wouldn't recommend researching stocks or funds using their interface -- they offer limited information in order to maintain the clean and uncluttered feel
If anyone is interested in signing up and jumping the wait list, I was sent some sign up codes I would be happy to share if you PM me. (no, I don't receive any compensation for this).

So far I have just been dabbling in it, but I like it. The key is to not be stupid and try and trade frequently chasing short term gains.
 
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