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

 

FYI they make their money primarily from order flow.

 

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

 

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

 

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.

 

Order flow? What's that?

 

compensation from third party

 

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.

 

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?

 

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+

 

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.

 

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


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

 

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.

 

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.

 

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."

 

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

 

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

 

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.

 

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.

 

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.