Users can trade stocks, ETFs, options, cryptocurrency, and more with Robinhood, a dominant player in the investing industry.
People who “bet it all” on hot stocks and options have also received a lot of bad press recently. A record fine of $70 million for “systemic supervisory failures” was recently imposed by FINRA.
Robinhood touts itself as the future of money, offering zero-cost trades, a well-designed mobile app, and a slew of high-profile investors.
Does its commission-free trading platform make sense for customers and investors? Should you, as an investor, give it a go?
What I really think about Robin Hood, is that there are better free options for long-term investors.
This review will go over Robinhood to see if it really is the best Free Investing App out there.
You’ll learn whether Trading is the right online business for you.
And at the end, you’ll find answers to some of the most frequently asked questions regarding Robinhood and Brokerage Trading in general.
But most importantly, you’ll see the exact system many others have used to build their own internet marketing business to over $40,000 a month in mostly passive income.
This system made them swear off Stock, ETFs, Options Trading for good, because it uses some of the same skills but in a much more powerful and profitable way!
Robinhood is a free mobile investing and banking app. It is a tech start-up that aims to change the investment game.
And it’s working. Trading stocks, ETFs, and options with Robinhood is free. This was unheard of when it was launched. Nowadays, almost all major stockbrokers charge no commissions or fees.
In my opinion, most users are better served elsewhere. But if you’re interested in Robinhood, read on.
Robinhood’s main features include:
In addition, Robinhood Gold offers low-cost margin trading.
Robinhood Cash Management – a debit card cash management bank account.
Trading mutual funds are not supported by Robinhood. On Robinhood’s platform, you also can’t buy bonds.
In this Robinhood review, we’ll dig deeper.
Robinhood is designed for people who are new to investing and want to learn the basics. But once you learn to invest, Robinhood may not be enough. Because Robinhood’s trading tools and features are inferior to those of the best online stock brokers.
Trading tools: Compared to category leaders, Robinhood’s trading tools are limited. Charts, for example, are essential, with only four technical indicators. TD Ameritrade has over 400 and TradeStation nearly 300. TD Ameritrade and Charles Schwab, for instance, offer live broadcasts with in-house experts during the day.
Fractional shares: The simplicity of Robinhood is its greatest strength. For example, its recurring investment strategy tool allows you to invest a fixed dollar amount weekly. With Dividend Reinvestment enabled, Robinhood automatically reinvests dividends earned from the stock market or Stock ETFs Options, provided the symbols support fractional share trading.
Robinhood’s mobile app is my favorite for simplicity. Robinhood provides:
Watch lists: Simplicity has its drawbacks. The watch list functionality is minimal, with only a few optional columns beyond the last price and percentage change. TD Ameritrade and TradeStation both offer over 300.
Free Stock Charts: There are six default date ranges and two chart types when pulling a stock quote. In addition, horizontal viewing in landscape mode is not supported. Using the free CNBC mobile or Yahoo Finance apps provides superior charting.
Price alerts: Users cannot set custom price alerts for individual stocks. Free Stock Price Alerts is an industry-standard feature.
In addition to stock trading, Robinhood offers cryptocurrency trading and ETF trading.
Robinhood’s business model for making money: Facebook (FB) is a free service. It makes money by collecting user data and selling ads to offset not charging a subscription fee. Robinhood is also a free service. The difference is that instead of selling ads, Robinhood sells your order flow to wholesale market makers. So Robinhood isn’t free. However, in today’s world of $0 trades, nearly all brokers, except Fidelity, accept payment for order flow (PFOF).
Robinhood Gold: I found Robinhood Gold to be of poor value during our research. ACCORDING TO MORNINGSTAR, level II streaming quotes and margin trading are available for $5 a month (which charges 5 percent annual interest). For the same $0 per stock trade, TD Ameritrade, E*TRADE, and Charles Schwab charge higher margin rates but offer better stock research, trading tools, and customer service.
Penny stocks: OTC stock trading is not supported by Robinhood. Only NASDAQ or NYSE penny stocks are supported by Robinhood.
Few companies offer commission-free cryptocurrency trades like Robinhood. Currently, it only supports seven coins:
This is one of the grounds why Robinhood hasn’t made our list of best crypto exchanges. It’s also worth noting that while Robinhood doesn’t charge a fee directly for crypto traders, the spread does.
Robinhood Gold is the company’s top-tier product. Gold can be obtained for as little as $5 per month.
Robinhood Gold provides you with:
Robinhood also announced in December 2020 that it would reduce its margin rate from 5 percent to 2.5% on any amount above $1,000 (the first $1,000 is included in your Gold monthly fee). That is one of the lowest rates available anywhere.
After a rocky start, Robinhood now offers a cash management account with an APY that rivals the top high yield savings accounts.
The current APY is 0.30 percent. Like all variable rates, this may rise or fall.
This account is a no-brainer with no minimum balance requirements, monthly fees, and no overdraft fees.
The only drawback is that other ATM fees are not reimbursed. You’ll have to download their app to get around this. You’ll get a great cash management product if you meet these requirements.
Mutual funds, bonds, and futures trading are not supported at Robinhood, and neither is cryptocurrency trading.
I’m always wary of companies that offer freebies. This isn’t a charity. Investors will be looking to take it public and make millions. But they need to make money to do so. How do they do it?
They have two. First, they sell your data to third parties. This is a significant source of revenue for them, but it may cost individual investors money.
A subscription to Robinhood Gold Account allows you to access features like margin trading.
These are irrelevant to long-term investors. A $0.01 increase (potentially) per share shouldn’t affect a long-term buyer. But if you’re a trader (like Robinhood’s platform), this could be costly.
Sign up for Robinhood and get a free share of stock. The share’s value is theoretically between $3 and $225, but Robinhood predicts it will be between $2.50 and $10.
They occasionally offer a better bonus. View current offers:
$15 New Student Sign-Up Bonus
Open a new account with a dot.edu email address and get a $15 bonus. Between September 15 and October 24, students who sign up with a “.edu” email and link a bank account will receive $15.
Another area in which Robinhood falls short. Under increasing pressure, Robinhood has finally announced 24/7 phone support – but you must still access it through the app.
Its “Support” page is nothing more than a collection of FAQs. And on its “Contact” page, there’s only one sentence: “Sign in so we can provide better and more personalized support.”
Security features include TLS protocol data protection, TouchID, FaceID, custom PIN code, and two-factor authentication for Robinhood account.
While still being hacked in October 2020. A hacker gained access to nearly 2,000 accounts, and at least one customer has already sued Robinhood.
All brokerage accounts are protected by SIPC up to $500,000. Cash accounts are insured up to $1.25 million by Robinhood’s partner banks.
Because Robinhood is a securities brokerage firm. It is guided by the Securities and Exchange Commission (SEC), just like any other brokerage firm.
Furthermore, the app is a member of the Financial Industry Regulatory Authority voluntarily (FINRA).
FINRA is a self-regulatory organization in which many brokerages participate.
As you may recall, the Securities Investor Protection Corporation (SIPC) protects your money in Robinhood.
The SIPC provides up to $250,000 in cash claims and $500,000 in securities protection, so 99 percent of investors have NOTHING TO WORRY ABOUT.
Suppose you’re looking to start investing in stocks and ETFs with a small amount of cash in a taxable account. In that case, Robinhood is a broker worth considering. Simply be aware that you will be unable to invest in mutual funds or establish an IRA. Additionally, do not anticipate prompt and attentive customer service.
If you require something more robust, I strongly advise you to open an IRA or brokerage account with a well-known brokerage firm like TD Ameritrade or Fidelity. With every platform now commission-free, why not take advantage of full service at the same price?
The following are some of the most frequently asked questions about Robinhood:
Is there a catch with Robinhood?
While it is not technically a “catch,” one of the primary ways Robinhood generates revenue is through “payment for order flow,” which many believe is a conflict of interest.
How do I withdraw my funds from Robinhood?
Clients can withdraw up to $50,000 per day from their accounts. It’s worth noting, however, that Robinhood does not currently allow for the withdrawal of cryptocurrency purchased on its platform.
Does Robinhood support Dogecoin?
Yes, Robinhood customers can trade Dogecoin commission-free and at any time of day or night.
Is there a per-contract fee on options trades at Robinhood?
Because it doesn’t charge commissions, Robinhood is one of the few brokers that also doesn’t charge an option contract fee.
Is Robinhood currently offering any bonuses or incentives?
Yes, when you open a new account with Robinhood, you will receive one share of free stock. The share’s value could theoretically be anywhere between $3 and $225, but Robinhood estimates it will be between $2.50 and $10.
Our review team has come across a program in the real estate industry that is next level!
Although it’s not real estate in the traditional sense, it’s all digital.
Where Robinhood comes up a little short is in scalability.
It just takes too many resources (money included) for any regular person to bootstrap.
But what if you could make even more money off of little local websites without having to spend so much time and money learning stocks and cryptocurrencies trading.
With this digital real estate program, you can profit off LOCAL traffic to your website every single day!
Sound too good to be true?
Of course it does!
But it isn’t…in fact, business owners wish they had this skill!
All you have to do is build and rank a LOCAL website and forward the jobs off to a business owner in town, you could even email it to them!
This works for literally any service based business, tree service, plumbing, towing, etc.
Simple, after you forward the jobs off to a business owner and he makes some money off of them, you simply ask to make the deal beneficial for each other.
A fair price to charge per lead, depending on the industry is 10-20%…let’s just use the tree service industry for example and go by worst case scenario.
Let’s say you build and rank the site and only 10 jobs a month come in. The average tree service job is anywhere from $500-$2000!
That means at bare minimum you have an asset worth $500 a month!
See why they call it digital real estate now?
That’s a rent payment.
The great thing is how easy it is to scale. You don’t have to worry about spending boatloads of money on a single traffic source to get CRUMBS in different trades.
This program actually allows you to collect HUGE FLAT RATE DEALS. Truly passive income!
The training program takes making money online to a whole other level. The owner of the program walks you through how to build and rank a site hand in hand, with the occasional voice over when he is sharing his screen.
You will learn the importance of keywords, website name, how to send call notifications via email, backlinking, etc.
Once the training program is completed you will also have access to a Facebook group much better than the Robinhood group in our opinion. This group is much more active.
A business will always want more leads and another job. In fact it doesn’t even matter that the job isn’t coming from their website name…they see it as it is…expanding digital real estate.
Unlike Robinhood, more people have been able to walk away from their 9-5 job as well.
Now, we know you probably have tons of questions… So, check this out to learn more.