I would love to hear what people think about the trading app Robin Hood (robinhood.com). I am surprised to see very little discussion of it online despite it being out for a while now. It's main feature is there are no trading fees, which is great from small time stock investment. Everything else seems to be on the up-and-up. My question is, is their any risk in using this platform (higher than for the more established online brokerages)?
I've been using it for a little bit now and while the app has some UI fixes they need to make and improve on, the actual service is *so far* great. I always set limit orders after doing a market order to test, and it was just ... terrible. very slow fill and not even NEAR the price I was expecting. They are a new company so let's see if they can improve the app to make some of us happy. I wouldn't use it for day trading, but swing trading, it's great.
That is more or less my take on it too. I am acquiring pretty stable stocks do I have found buys to be processed quickly and at the expected price. I am sure that would be different with volatile stocks. What I am not really qualified or otherwise able to assess is their claim that my investments are "safe". That is, they would not be lost even if RobinHood itself ceased trading or went bankrupt. I am also unclear on how they make enough income to be viable. I get that they skim profits of uninvested balanced but unclear on the "for dummies" way of explaining their other income sources.
aside from the VC money they've got, they won't be profitable for awhile. I've heard they will introduce margin accounts, which will get them money as well. I'm going to assume the vast amount of people using Robinhood wont put a lot of money in it, so I see the interest they earn on that cash that remains uninvested a very very small amount of money for them. time will tell what they will do, I'm sure we'll see a lot of happenings over the next couple years.
I like their service, just a few growing pains. Not sure about the 'safety' either. While its true they are mostly VC -backed, but so are currently most of fintech companies like wealthfront, betterment etc - I suppose VCs gamble on the industry being transformed by those services. I any case, I love everything that lowers the fees.
The UI seems fishy to me. The idea is nice and I'm sure the gals at the site are great, as well, but until they tweak that UI a bit, I'm not even slightly eager to start using it. No.
My thoughts exactly, skennedy, it just makes sense to use a fee-free service to make your small buys and to spread even a small balance over multiple stocks. So there is no way they can actually be making money. But I assume that if they go broke I still actually own the stock and that asset is not in jeopardy? That seems to be what they claim? My experience just as a user so far has been great. It is my highest earning account. I am not clear on what will happen when my RH stocks earn a dividence. There seems to be not way to set what it done with it and not statement about it that I can find?
Thank you for the great conversation. I was just asking a bit about Robin Hood, mostly because of the need to have a low cost method. From what you have all said above it sounds like a place to try some things out, and that, at least for now, there is little risk of them going under.
