Robinhood is an online broker founded in 2013 that is great for investors that are looking to trade stocks, options, ETF’s and cryptocurrencies without commissions or fees. Robinhood was a pioneer in making stock trading free for all investors. Robinhood is popular trading app with its easy to use trading experience and no fee trading.
What is Robinhood
Robinhood is a commission free broker that offers stocks, options, exchange- traded funds, and cryptocurrencies trading through their website and mobile app. The company has a cash management account that pays interest and provides clients with a a debit card.
Robinhood Snapshot
Promotions: Get a Free Share of Stock
Account Minimum: $0
Stocks trades: $0
Options trades: $0
ETF’s Trades: $0
Cryptocurrency Trades: $0
Customer Service: Live Phone Support 24/7, Email support, Chat, Social Media
Mobile app: Available on Apple and Android Devices
SIPC Insured: Stocks and options in your account are protected up to $500,000 (including $250,000 for claims for cash).
How Robinhood Works
Robinhood allows investors to trade stocks, options, ETFs, and select cryptocurrencies with no commissions. The firm has one account option, which is an individual taxable account. Robinhood has no account minimum to get started which can be good new investors. Robinhood does not offer bonds and mutual funds, which could help you build a diversified portfolio.
Robinhood offers the ability to buy fractional shares. Fractional shares let you invest in stocks and ETFs that cost hundreds or thousands of dollars for a single share with as little as $1. Robinhood offers dividend reinvestment (DRIP) for your account that automatically reinvest dividends that you earned back into the stock or ETF. The firm offers Robinhood Snacks which is a daily newsletter with fresh takes on financial news.
Robinhood Crypto
Robinhood offers the ability to buy cryptocurrencies. You can trade cryptocurrencies 24/7 and commission free. Currently users can trade cryptocurrencies such as Bitcoin, Dogecoin, Ethereum, Ethereum Classic, Litecoin and more. When you buy Cryptocurrencies on Robinhood you do have the ability to swap or transfer your coins to a different wallet of your choice. You can buy fractional coins on Robinhood with as little as a $1.
Cash Management
Robinhood offer cash management for its clients. The account will earn interest on your uninvested cash while have access to it. Robinhood works with banks in their program to pay the interest that they pass on to clients.
The account comes with a debit card that you can customize the colors of the card. You have access to a network of 90,000+ Free ATMs. You are able to use the debit card nearly every master card is accepted. The account offers up to 1.25 Million of FDIC insurance from the program banks.The program gives you the ability to send checks for payment.
Robinhood Retirement
Robinhood offers Roth IRA and IRA for retirement accounts. Robinhood will match you 1% on contributions you make. The brokerage firm is one of the first brokerage to offer a non-employer sponsored match for a retirement account.
Robinhood Research
The platform’s research provides analyst ratings from Morningstar an investment research company, earnings calls and data, key stats on each security, line and candle charts, and news headlines for each stock.
Robinhood offers a stock screener where you can screen for stocks and find your next trade. You can scan for stocks with multiple filters including, technicals, price, market, financial, and options. You can build your own custom stock screener with multiple filters to find the trade you are looking for.
Robinhood Gold
Robinhood Gold allows investors to trade with margin or borrowed money . It is a fee based service that Robinhood offers. The minimum requirement Gold is $2000 due to federal regulations. Robinhood Gold starts at $5 per month. You get access to research reports from morningstar that provide in-depth stock research reports on around 1700 stocks, access to trade on margin , Level 2 market data, and bigger instant deposits. When you use robinhood gold you can get an instant deposit access to $5k-$50k when you make a deposit depending on your account balance. This is more than the normal instant deposit access of $1,000. New investors that want to use margin should be aware that trading with margin is risky.
Gold will also let you trade 30 minutes before the market open and 2 hours after the market closes. This can be useful with a big events happen like earnings or news and you want to enter or exit a position. Gold also offer access to instant deposits, an upgrade from the 4-5 days it takes normally.
PROS and CONS
Pros
- Commission free trading for Stocks, Options, ETF’s, and Cryptocurrency
- Easy to use app for Apple and Android
- No Minimum account balance
- No Fees for ACH Transfers
- Apple touch with finger print to login or password for security
- Market news notifications for your favorite stocks on your watch list.
Cons
- Limited free in-depth research
- Customer Support is limited
- No Mutual Funds or Bonds