As an attractive and easy platform to use, Robinhood is very popular among younger traders. I too started a Robinhood account when it was relatively new and loved the easy-access platform and app. This broker allows you to trade US stocks, indices, options, gold and cryptocurrency. They even have a new feature called fractional shares trading. With that, you can invest in any stock for less than one share is worth. Let's say you wanted to buy Amazon but didn't have $2,400 at your disposal. With fractional shares, you can put in $10 and own part of a share of the company.
Another cool feature that propelled this broker was the fact that it had commission-free trading. Unlike other brokers that charge commission on every trade, Robinhood charged absolutely $0. TD Ameritrade used to be $7 a trade. Since then, they have moved to zero commission as well.
All of these features are great to have, but there are some concerns that investors have kept in mind. Starting in late February, Robinhood servers began messing up due to a huge amount of volume being traded. People who had their trades in couldn't take profit or get out of a trade, buy orders failed, and sell limits failed. The whole system shut down for twelve hours, and investors were furious. One person lost around $500,000 because his orders didn't get filled. Now Robinhood is under a class-action lawsuit, and traders were given a sincere note of apology as well as a request form to report what trades went wrong. Fortunately, I was not in any big trades at the time and was left pretty much unscathed. Overall, the sentiment for Robinhood trading was questioned and uncertain if the servers would be able to execute trades accurately when the time comes. Since then, Robinhood has been working hard to improve and give customers lots of resources and new features to help trading access, but that event was a hard lesson for both Robinhood and its traders.
In my opinion, Robinhood is nice for beginners with small accounts who are looking to start their investment journey. It also has a pretty quick and accurate execution time for those who want to trade. Also, trading options has never been easier than on the Robinhood app. It helps explain everything to those who don't fully understand options, like most options traders.
If I had to rate Robinhood, I'd give it a 7/10 because it was the first platform/broker I ever used to trade real money and was super easy. I was able to clearly see news, analysts rankings and real-time movements all on my phone. Now, most brokers provided a phone app and commission free trading to battle the disrupting business Robinhood has created. Overall, I think Robinhood is a great platform and will be even better in the future. But for now, they have a few kinks to work out.
Featured Photo: https://cdn.robinhood.com/assets/robinhood/shared/robinhood-preview.png
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Please note that this email is my personal opinion only. I am not a licensed financial advisor, and any information shared or discussed is not to be construed as investment advice. Trading and investing involves a degree of risk, and is not suitable to all investors. Please consult with your financial advisor before making any sort of investment decisions.
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