Anyone here use Robinhood?

[MJ DeMarco]

Kinda hard to beat ZERO cost trades in either options or stocks.

Robinhood

I made a small deposit there but haven't traded anything because the interface isn't really that great. But then again, maybe a wonky interface is better than spending a fortune on commissions, which I'm doing at a variety of other places.

With this platform, there is really no excuse to start building your passive income money system.

 

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[Solais]

Kinda hard to beat ZERO cost trades in either options or stocks.

Robinhood

I made a small deposit there but haven't traded anything because the interface isn't really that great. But then again, maybe a wonky interface is better than spending a fortune on commissions, which I'm doing at a variety of other places.

With this platform, there is really no excuse to start building your passive income money system.

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Been using it since 2016. Not good for day traders IIRC but useful if you're "trade once every month" type

 

[lludwig]

FYI they make their money primarily from order flow.

 

[Guest3722A]

There's a Facebook group called "Robinhood Stock Traders 2018". You'd need to filter through the stock picks and things like that to get to the various pros and cons of the service. From a quick glance just now it appears they're not offering buy orders on certain stocks like Aurora. I've also heard horror stories in the past of replies taking days with their email based customer service. This concerns me because if say a sharp correction occurs and if for some reason the system goes down, I get the feeling that alot of people would take unnecessary losses. I think they also have an upgrade service for a fee, but I don't know anything with that. On the positive side, they seem to have many satisfied customers. I haven't funded my account there yet, but if you use them, I'd be interested in hearing your experience with them. Have you looked into Tastyworks? Very low commissions and fees and the platform is designed by the same guy who did ToS and is specifically developed for options trading. They offer stocks, futures and options on both. From my personal experience, I like them alot. My communications with them has also been email based, but they're on it like blue bonnet.

Options Commissions | Check Out tastyworks' Commission Structure

 

[Tommo]

FYI they make their money primarily from order flow.

I was just going to ask the question you answered, thanks lludwig.

 

[Timmy C]

Not as yet.

Unfortunately it's not available as yet to Australian users but i have signed up to be notified when it will be.

Yeh i hate getting killed on trading fees.

 

[ZF Lee]

FYI they make their money primarily from order flow.

Order flow? What's that?

 

[Timmy C]

compensation from third party

 

[lludwig]

Order flow? What's that?

Letting others (hedge funds, actively managed mutual funds, etc.) know the buy and sell info of customers on Robinhood. They can legally use it to "front run" the orders ahead of you and pick up a few cents on the trade.

Believe it or not, I'm actually ok with this for the small trades the individuals who use their system.

Net-net Robinhood customers come out ahead compared if they were to pay say $4.95 per trade.

If you were making large trades (ie in the millions) the selling of the order info could wind up costing you more.

Overall high frequency trading and the outright selling of the order info helps the little guy since the bid/ask spread is lower. Overall helps with liquidity of a stock/ETF.

The bigger problem IMHO is their crappy customer service and issues with placing orders.

But hey it's free! In the end TSNSTAAFL. Someway/Somehow you are paying for it.

 

[Jaden Jones]

I found the options to not pay as well on Robinhood, not sure why. When doing my spreads on think or swim, they seem to pay a couple cents better than Robin Hood. I found think or swim payed better than a few other ones as well. Depending on how much your trading, it may or may not be worth your while. Best to just run both and compare trade for trade. There always seems to be a catch with free, although many people may not notice or care depending on what they trade.

 

[MJ DeMarco]

Have you looked into Tastyworks?

Been a customer since it launched. Interface is OK. I'm pretty fluent on TOS and it is my preferred go-to.

 

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[lludwig]

I found the options to not pay as well on Robinhood, not sure why. When doing my spreads on think or swim, they seem to pay a couple cents better than Robin Hood. I found think or swim payed better than a few other ones as well. Depending on how much your trading, it may or may not be worth your while. Best to just run both and compare trade for trade. There always seems to be a catch with free, although many people may not notice or care depending on what they trade.

Makes perfect sense.

If you are an active trader, even though Robinhood is trying to set themselves up for the active trader you won't get the best pricing by any means.

On a side note, I find it ironic that they named themselves "Robinhood". Perhaps stealing from the poor to give to the rich?

 

[andyhaus44]

Kinda hard to beat ZERO cost trades in either options or stocks.

Robinhood

I made a small deposit there but haven't traded anything because the interface isn't really that great. But then again, maybe a wonky interface is better than spending a fortune on commissions, which I'm doing at a variety of other places.

With this platform, there is really no excuse to start building your passive income money system.

View attachment 21950

MJ, thank you so much for sharing this! My boy is 20 months old and have been wanting to buy him stock in PBS and Disney but wasn’t sure which brokerage account to go with. Last night I opened a Robinhood account and did just that. Rep+

 

[Bryan James]

I know a lot of people who use Robinhood and I hear good things from them. Personally I don't use it (not because of any red flags I've perceived but because I've been with a separate brokerage for some years before I ever even heard about RH) but they seem to really like it.

 

[lludwig]

Cliff Asness has a good summary on HFT and agree with his position on the subject.

View: https://www.youtube.com/watch?v=y8dQrp9pCB8

 

[MJ DeMarco]

Robinhood tempts savers with 3% interest on checking accounts — should consumers hand over their cash?

Again, really no reason why young people can't get started on their money system early. Wish I had these tools when I was 19.

FYI: I canceled my Robinhood account as loathed the interface, but it still looks like a great deal for anyone looking to start.

 

[Kak]

Robinhood tempts savers with 3% interest on checking accounts — should consumers hand over their cash?

Again, really no reason why young people can't get started on their money system early. Wish I had these tools when I was 19.

FYI: I canceled my Robinhood account as loathed the interface, but it still looks like a great deal for anyone looking to start.

I saw that this morning in WSJ. Very interesting. I think it will pioneer a different fee structure for the rest of the industry to chase.

Personally, I don’t like the name. Robin Hood is a communist criminal.

 

[ApparentHorizon]

Robinhood tempts savers with 3% interest on checking accounts — should consumers hand over their cash?

Again, really no reason why young people can't get started on their money system early. Wish I had these tools when I was 19.

FYI: I canceled my Robinhood account as loathed the interface, but it still looks like a great deal for anyone looking to start.

Be aware this is insured by SIPC not FDIC

Every Robinhood account is SIPC insured up to $250,000 in cash

--

(SIPC) is a nonprofit membership corporation that was created by federal statute in 1970.

SIPC does not provide blanket coverage. Instead, SIPC protects customers of SIPC-member broker-dealers if the firm fails financially. Coverage is up to $500,000 per customer for all accounts at the same institution, including a maximum of $250,000 for cash.

SIPC does not protect investors if the value of their investments falls. When you think about it, this makes sense. After all, market losses are a normal part of the risk of investing.

I read your account can be affected by market fluctuations. Anyone with experience can expand?

--

Users of Robinhood Checking and Savings earn 3% interest annually on each of their Checking and Savings balances. Robinhood does not charge account maintenance, account minimum, overdraft, ATM, transaction, foreign transaction, transfer, or card replacement fees for Robinhood Checking and Savings. Robinhood Checking and Savings is offered through Robinhood Financial LLC. Robinhood Checking and Savings is an added feature to existing Robinhood accounts and is not a separate account or a bank account. The Robinhood Debit Card is issued by Sutton Bank pursuant to a license from Mastercard International, Inc. Neither Sutton Bank nor Mastercard International, Inc. are members of FINRA or SIPC.

 

[lludwig]

Be aware this is insured by SIPC not FDIC

Every Robinhood account is SIPC insured up to $250,000 in cash

SIPC isn't exactly like FDIC and is to cover fraud ONLY!

With either program, it's a backstop and I would recommend always as the last resort. It can take months in some cases years before you get your money back and more so with SIPC. During 2008 it never came to FDIC since the FED got involved and found buyers for the larger institutions. For the smaller ones they had the reserves to give instant money back.

So while you may not lose your money could, in theory, be tied up for years.

I think this article sums it well.

FDIC vs SIPC: Are they the same?

"What SIPC does cover is any sort of shenanigans that a broker might play on you. If they screw up and delete your account, or give your money to someone else, or close up shop and head to Grand Cayman, SIPC ensures that you will get your money back. But it does not cover investment losses."

 

[lludwig]

Robinhood said to not be properly insured to offer checking & savings

 

[YoungPadawan]

Robinhood tempts savers with 3% interest on checking accounts — should consumers hand over their cash?

Again, really no reason why young people can't get started on their money system early. Wish I had these tools when I was 19.

FYI: I canceled my Robinhood account as loathed the interface, but it still looks like a great deal for anyone looking to start.

Yeah I just got that email a while back. It is really tempting to switch over from Schwab.

 

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[Primeperiwinkle]

Started the thread all “Yasss I’ve been using them for over a year”

Ended the thread “Dammit”

Thanks people who do all the research things... I’m gonna go get my five hundred bucks and put it somewhere else.

 

[Kak]

Saw the CEO in the WSJ this morning.

This picture tells me all I need to know.

What an irreverent and unprofessional way to represent your FINANCIAL INSTITUTION.

 

[GPM]

Saw the CEO in the WSJ this morning.

This picture tells me all I need to know.

What an irreverent and unprofessional way to represent your FINANCIAL INSTITUTION.

View attachment 22856

Yea but he is "edgy" and "disruptive", so that means it is cool to look that way, right? That is the latest bandwagon. In 20 years we are going to look back at these clowns and wonder why it was ever hip to look like a slob.

 

[MJ DeMarco]

What an irreverent and unprofessional way to represent your FINANCIAL INSTITUTION.

Unless that "look" resonates with market you are targeting.

I will argue they are -- young people with not a lot of disposable cash. I doubt a guy with a 3 piece suit will appeal to the millennial with $420 to their name, no double entendre intended.

 

[Kak]

Unless that "look" resonates with market you are targeting.

I will argue they are -- young people with not a lot of disposable cash. I doubt a guy with a 3 piece suit will appeal to the millennial with $420 to their name, no double entendre intended.

LMAO at the $420.

I still don't see unprofessionalism as a marketing strategy unless you're talking about "Dick's Last Resort." But I digress. Certainly not for me.

 

[lludwig]

Unless that "look" resonates with market you are targeting.

I will argue they are -- young people with not a lot of disposable cash. I doubt a guy with a 3 piece suit will appeal to the millennial with $420 to their name, no double entendre intended.

Agreed, but you should always dress better than your clients. At least a sportjacket in this guy's case.

 

[MJ DeMarco]

Whoosh, first it's there, then it isn't!

Robinhood quietly stops users from signing up for cash accounts amid scrutiny from regulators

Kind of a sign that this isn't a place you want your life savings.

 

[ApparentHorizon]

The lack of competence by the company makes me uncomfortable to keep any money on their platform.

It's nothing new from the silicon valley types. Incompetence disguised as creativity and innovation.

At least they were smart enough to read the writing on the wall...err...blogs. Before people lost their shirts, and they could have been in deep doodo.

 

[loop101]

Yikes. Robinhood daytrader makes $45k, gets $800k tax bill.

Trading in and out of stocks, 10 to 50 times a day, you are going to book all kinds of small gains and small losses, in this person's case, maybe a few hundred on average. As a wild guess, not knowing his exact circumstances, we're talking close to $2 million in both gains and losses with gains outpacing losses by the earlier mentioned $45,000.

The problem is, the IRS only counts the gains, not the losses. Depending on his circumstances, he should be able to use those losses to raise his cost basis potentially saving him some taxes in the future, but that doesn't help him right now.

This is a really good example of not knowing what you don't know. If you are a normal human being who thinks in logical ways, there really is no reason why a thing such as a wash sale would ever occur to you, which is why, no matter what, you should always do some research into any new venture with which you have little to no familiarity.

Robinhood day trader looking at $800,000 tax bill even though he only made $45,000 trading stocks. Yes, this can really happen.

It does not sound possible, but we're not talking math or logic here, we're talking the tax code, and with the tax code, "2 + 2" can sometimes equal "you're hosed."

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