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Robinhood

Broker-dealer
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51% of retail CFD accounts lose money

About

Robinhood is a popular online brokerage platform that offers commission-free trading of stocks, ETFs, options, and cryptocurrencies. The platform is known for its user-friendly interface, easy account setup, and mobile app.

Founded in 2013, Robinhood was created with the goal of democratizing finance and making investing accessible to everyone. The company has since gained a large user base, particularly among younger investors who appreciate its simplicity and low fees.

Regulation and Security

Robinhood is a regulated broker-dealer and is registered with the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). This means that the company must comply with a range of regulatory requirements and undergo regular audits to ensure that it is operating within the law.

Security question is taken very seriously and uses industry-standard measures to protect its users' accounts and personal information. This includes multi-factor authentication, data encryption, and other security protocols.

Fees

Commission-free trading of stocks, ETFs, options, and cryptocurrencies is what company is famous for. This means that users can buy and sell these securities without paying any fees or commissions.

However, Robinhood does charge certain fees for other services. For example, if you use Robinhood's premium features such as Robinhood Gold, which offers extended trading hours and margin trading, you'll pay a monthly fee based on the amount of margin you use. Additionally, there are fees for wire transfers, paper statements, and other services.

Robinhood's commission-free trading can be appealing, users should carefully evaluate their investment goals and do their own research before making any trades. Depending on your trading volume and investment style, other brokers may offer more competitive pricing and better overall value.

Tradable Assets

Stocks Clients can buy and sell stocks from a wide range of companies listed on major US exchanges such as the NYSE and NASDAQ.

Exchange-Traded Funds (ETFs) Selection of ETFs that track various indices, sectors, and asset classes.

Options Users can trade options contracts on a variety of underlying stocks and ETFs.

Cryptocurrencies Robinhood offers trading in several popular cryptocurrencies, including Bitcoin, Ethereum, Dogecoin, and others.

Not all assets may be available for trading, and the selection of available assets may change over time. Additionally, users should carefully evaluate the risks and potential rewards of any investment before making a trade.

Trading Platforms

Robinhood offers trading through its mobile app and website. Both platforms offer similar functionality, including the ability to trade stocks, ETFs, options, and cryptocurrencies, view market data and news, and manage your account.

The mobile app is particularly popular among Robinhood users, thanks to its easy-to-use interface and on-the-go access to trading. The app is available for both iOS and Android devices and offers features such as price alerts, watchlists, and customized news feeds.

Company website is also user-friendly and offers additional features such as a web-based trading platform for options trading and access to Robinhood's cash management account. However, some users may find the website less convenient for trading on the go.

Account Types

Robinhood offers several account types to meet the needs of different investors:

Individual brokerage account This is a standard brokerage account that allows individuals to buy and sell stocks, ETFs, options, and cryptocurrencies.

Joint brokerage account A joint brokerage account allows two or more people to share ownership of an account and trade together.

Traditional IRA A traditional IRA is a tax-advantaged retirement account that allows individuals to invest in stocks, bonds, and other assets with pre-tax dollars.

Roth IRA A Roth IRA is another type of tax-advantaged retirement account that allows individuals to invest after-tax dollars and enjoy tax-free growth and withdrawals in retirement.

Robinhood Cash Management This is a cash management account that offers FDIC insurance on up to $1.25 million of deposits and access to Robinhood's debit card and ATM network.

Each account type has its own eligibility requirements and tax implications, so users should carefully consider their investment goals and consult with a financial advisor before opening an account.

Educational Tools

A range of educational tools and resources are available to help users learn more about investing and improve their trading skills.

Robinhood Learn A free educational hub that offers articles, videos, and tutorials on a variety of investing topics, from the basics of buying stocks to more advanced options trading strategies.

Robinhood Snacks A daily newsletter that provides a quick and easy-to-understand summary of the day's financial news and market trends.

Webinars Robinhood periodically offers webinars on various investing topics, featuring expert guest speakers and interactive Q&A sessions.

Demo Account Robinhood offers a "paper trading" feature that allows users to practice trading with virtual funds, without risking real money.

FAQ Users can access a help center with FAQs and troubleshooting guides.

Robinhood's educational resources are a useful starting point for new investors, although some users may prefer more in-depth educational tools and resources offered by other brokers.

Customer Support

Email support Users can send an email to support@robinhood.com to receive assistance with account-related issues.

In-app support The Robinhood mobile app and website offer a help center with frequently asked questions and troubleshooting guides, as well as a live chat feature for immediate assistance during business hours.

Phone support Robinhood also offers phone support for urgent issues, although users may experience longer wait times during periods of high call volume.

Social media Users can also reach out to Robinhood's customer support team via social media channels such as Twitter and Facebook.

Robinhood's customer support is generally regarded as satisfactory, although some users have reported longer wait times or difficulty getting in touch with a representative.

Bonus and Promo

Broker occasionally offers bonuses and promotions to attract new users and encourage existing users to trade more. Some examples of Robinhood bonuses and promotions include:

Free stock The free stock is given to new users who sign up using a referral link from an existing user. The free stock is selected at random and can be worth up to $500.

Commission-free trades Robinhood's standard trading fees are already low, but the platform has also offered limited-time promotions with completely commission-free trades.

Bonuses and promotions are subject to change and may not always be available. Users should also be aware of any terms and conditions associated with these offers, such as minimum deposit requirements or restrictions on when the bonus or free stock can be redeemed.

Account Opening

1 - Download the Robinhood app Download the Robinhood app from the App Store or Google Play Store, or visit the Robinhood website.

2 - Email address and password Click on "Sign Up" and enter your email address and password.

3 - Personal information Provide your personal information, including your name, date of birth, and social security number.

4 - Investment experience and goals Answer a few questions about your investment experience and goals.

5 - Link a bank account Link a bank account to transfer funds for trading and withdrawals.

6 - Account approval Wait for your account to be approved, which typically takes a few days. Once your account is approved, you can start trading stocks, ETFs, options, and cryptocurrencies.

Robinhood may require additional documentation to verify your identity, such as a driver's license or passport. Additionally, certain account types, such as IRAs, may require additional paperwork or eligibility requirements.

Deposit and Withdrawal

Bank transfer Users can link their bank account to Robinhood and transfer funds via ACH (Automated Clearing House) transfer.

Debit card Robinhood also offers a debit card through its Cash Management feature, which can be used to deposit funds into the account and make purchases or withdrawals at ATMs.

Wire transfer Clients can also initiate a wire transfer from their bank to Robinhood to deposit funds.

Robinhood may impose limits on deposits and withdrawals, and users should also be aware of any potential fees or delays associated with these transactions.

Spreads

Commission-free trading is offered, which means that users do not pay a fee to buy or sell stocks, ETFs, options, or cryptocurrencies on the platform.

Traders should be aware that Robinhood's spreads - the difference between the bid and ask prices of an asset - may be wider than those of other brokers. This means that trader may pay a higher price to buy an asset and receive a lower price when selling it.

Robinhood's spreads can vary depending on market conditions and the asset being traded. For example, stocks with high trading volume and liquidity may have tighter spreads than less popular stocks or less liquid assets like cryptocurrencies. Additionally, users should be aware that options trading on Robinhood may incur additional fees, such as options contract fees and exercise and assignment fees.

We should mention that Robinhood's commission-free trading model can be attractive for users who are looking to minimize trading costs, but users should also be aware of the potential impact of wider spreads on their trades.

Leverage

Robinhood does not currently offer margin trading, which is a form of leverage that allows traders to borrow funds from the broker to make larger trades. As a result, users cannot trade with leverage on the Robinhood platform.

However, offers options trading, which allows users to control a larger amount of an asset with a smaller amount of capital. Options trading can be considered a form of leverage, as it allows traders to make bets on the price movement of an asset without having to purchase the asset itself.

Trading Hours

Robinhood trading hours depend on the market being traded. Here are the trading hours for the different markets available on Robinhood:

US Stocks and ETFs The regular trading hours for US stocks and ETFs on Robinhood are from 9:30 AM to 4:00 PM Eastern Time, Monday through Friday. However, users can also trade during the extended hours session, which runs from 4:00 PM to 8:00 PM Eastern Time.

Options Options trading on Robinhood follows the same schedule as US stocks and ETFs, with regular trading hours from 9:30 AM to 4:00 PM Eastern Time and extended trading hours from 4:00 PM to 8:00 PM Eastern Time.

Cryptocurrencies Trading for cryptocurrencies on Robinhood is available 24/7.

Trading hours may be subject to change due to holidays or other events, and users should check the Robinhood website or mobile app for the latest information. Additionally, users should be aware of the potential impact of after-hours trading on the price and liquidity of the assets they are trading.

Advantages

Commission-free trading Commission-free trading for stocks, ETFs, options, and cryptocurrencies, which can save users money compared to traditional brokers that charge fees per trade.

No minimum account balance Users can open and maintain a Robinhood account with no minimum balance requirement, which can make it more accessible for new or small investors.

User-friendly interface Mobile app and website are designed to be intuitive and user-friendly, making it easy for users to research and trade assets.

Educational resources Robinhood offers a variety of educational resources, including news articles, podcasts, and webinars, to help users learn more about investing and trading.

Fractional shares The ability to buy and sell fractional shares, which can allow users to invest in expensive stocks or ETFs with smaller amounts of capital.

Cash management features Traders are offered a suite of cash management features, including a debit card with no fees for transactions or ATM withdrawals, and a high-yield savings account.

Disadvantages

Not available for non-US traders Robinhood is currently only available to customers who are legal residents of the United States, which means that non-US traders are not able to use the platform.

Limited research and analysis tools Some basic research and analysis tools are available, such as news articles and price charts, it does not offer more advanced tools or research reports that are available through some other brokers.

Limited asset selection While Robinhood offers trading for a variety of assets, including stocks, ETFs, options, and cryptocurrencies, its selection may be more limited compared to other brokers.

Limited customer support Limited customer support options, with no phone support available and a primarily online-only support system. This can be a disadvantage for users who prefer more personal support or need assistance with more complex issues.

Potential for wider spreads While commission-free trading is offered, its spreads - the difference between the bid and ask prices of an asset - may be wider than those of other brokers. This can lead to users paying a higher price to buy an asset and receiving a lower price when selling it.

No retirement accounts Retirement accounts, such as traditional or Roth IRAs, which can be a disadvantage for users who are looking to invest for retirement are not available.

No margin trading No margin trading, which can be a disadvantage for users who want to use leverage to make larger trades.

Summary

$0
Minimum Deposit
SEC / FINRA
License
Bank transfer / Debit card / Wire transfer
Deposit / Withdrawal Options
Robinhood platform
Trading Platform
Individual brokerage account / Joint brokerage account / Traditional IRA / Roth IRA / Robinhood Cash Management
Accounts
Stocks / Exchange-Traded Funds (ETFs) / Options / Cryptocurrencies
Tradable Assets
Nasdaq
Liquidity Provider
Yes
Affiliate Program
Yes
Mobile Trading
24/7
Client Support
Please note that trading carries risks, and traders should always conduct their own research and risk assessment before opening an account with any broker.