Robinhood Trading App

Discussion in 'Stock Market Education' started by Takii, Feb 26, 2016.

  1. Takii

    Takii Member

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    Found an article recently about a service that lets traders buy stock without paying a base commission. Seems like this would be an amazing opportunity for micro traders whom the standard brokerages and their crazy priced commissions. Well maybe not so crazy for your investor that is purchasing or selling 100 shares at a time. But for the micro-trader, these commissions make it very hard to day trade and accumulate capital.

    This service is called RobinHood. Anyone heard of it? What is your opinion of this and other services like it.

    The only thing I don't like is I wish I could fund my account with my debit card. I don't have a traditional bank, nor do I need one. And yet I'll HAVE to get one to work with this platform.
     
  2. Penny

    Penny Well-Known Member

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    I use it and it works fine. I would not use it for day trading as trades are not immediate. They don't offer all funds etc. But they do have most stocks. It is a convenient way to get small amounts of individual stocks without being hammered by fees. But that's about the limit. It's also quite new and I am not sure how they will make a profit int he long run. So I would hesitate to make it my main trading account.
     
  3. kgord

    kgord Senior Investor

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    Well, as the old saying goes, build a better mousetrap and the world will beat a path to your door. It sounds like this might be something to consider when using the Robinhood site. I mean having to pay no commissions for trading sounds like the way to go. I really like the name too. It is pretty cute!
     
  4. Takii

    Takii Member

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    You say the trades are not immediate....how long does it take for a trade to happen once you either a buy or a sell order? I'm not too worried about this because I'm mainly interested in building a portfolio based on dividend stocks and purchasing with no cost trades makes it easier to diversify that portfolio even if its only a single share of each stock in a portfolio containing 10-20 stocks which I have heard is what you need for a well diversified portfolio.
     
  5. Penny

    Penny Well-Known Member

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    RobinHood is a go way to get stocks without fees. But I would not try to keep my whole portfolio there for the very reason that you can't diversify. You can't use it to buy bonds, mutual funds, options or pretty much anything but US stocks and some ETFs. That's way it is mostly good for younger investors who like simple app and buying well known stocks like consumer brands. You also get basically no trading, research, informational resources.

    That is why I still mainly use a normal brokerage account (Fidelity in my case), but use RH to pick up US stocks to bulk up that sector without paying fees.
     
  6. Takii

    Takii Member

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    And that is exactly what I like about them. Nothing to clutter up the purchase experience or any value added services I am not looking for.

    I sold off my entire portfolio this morning at opening time, as soon as the bell rang so to speak. Reinvested in seven stocks I had been researching all night and by closing bell today I was up well over 2k from my starting point.

    Largest swing I have ever had in a single days trading. And it cost me NOTHING to do these buys. I do believe Robinhood charges a small fee for sells, not sure how much that is but I really don't care considering how my research turned out today. I know their sell charges don't add up to anywhere near 2k.
     
  7. gracer

    gracer Senior Investor

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    It's the first time I've heard about Robinhood trading app but reading all your posts makes me very interested in this. So is this basically a new way of trading? For someone who's considered as an average trader like me, I think this can work because in what I understand from the previous posts it's actually a simpler trading platform. :)
     
  8. Penny

    Penny Well-Known Member

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    Well, that is kind of the opposite of a diversified portfolio. Depending on what stocks you picked it is either very or moderately narrow and therefore volatile--not even taking into account that RobinHood itself is a start-up and therefore has an elevated risk of not being around in 10-20 years (assuming you have a a buy and hold strategy).
     

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