Robinhood Brokerage Review –
Robinhood Review: Platform Highlights
- Robinhood is a great choice for complete beginners.
- Robinhood offers $0 Stock, ETF, Options & Crypto Buys & Sells.
- Robinhood does not offer retirement accounts.
- Free after-hours/extended hours trading.
- Offers basic research features through both the app and the web interface.
- Promotion: New users a FREE Stock By Signing Up.
What Is Robinhood?
Robinhood is a unique brokerage firm established in 2013, that was released for one purpose, bring commission-free trading to the masses. They have been constantly changing and are currently offering Stocks, ETFs, Options, and Crypto all for FREE. Robinhood was designed for the newer investor, so it was designed to be the simplest trading platform out there. This, in turn, is one of their downfalls as advanced traders find the simplicity lacking when it comes to technical indicators, graphs, stock data, order types, and research tools.
Robinhood Promotion – FREE Stock!
Using Robinhood, you can begin investing with $0, By signing up through my referral link and you get a stock valued between $3 and $150.
- ~80% chance the stock has a value of $3-$10;
- ~18% chance the stock has a value of $10-$50;
- ~2% chance the stock has a value of $50-$150.
$0 That’s right, Robinhood allows users to trade Stocks, ETFs, Options, and CryptoCurrency completely free. There are no strings attached or hidden fees of any kind.
Robinhood has no minimum balance to open an account, but federal regulation requires you need to have $2,000 to use margin. The first $1,000 of margin is included with your $5 monthly gold fee (Sell Below). If you decide to borrow more, you’ll pay 5% yearly interest on any margin used above $1,000.
Robinhood offers a taxable brokerage account, this is different from a retirement account. If you make money because your investments go up in value, or because your investments pay you dividends or interest, this income will be taxed. Taxes depend on the type and source of the gains or the income you earn in a given period.
Trade & Order Types
Robinhood offers the following trade selection;
- Trade Options – Stock Going Up Buy a Call, or Stock Going Down Buy a Put.
- Buy Order Types – Market, Limit, Stop Loss, Stop Limit.
- Sell Order Types – Market, Limit, Stop Loss, Stop Limit.
Robinhood Design and UI
Robinhood already comes packed with $0 Commission on Stocks, ETFs, Options & CryptoCurrency, but there is more.
- Robinhood’s news feed includes stories from Yahoo Finance, Seeking Alpha, Associated Press, Marketwatch, and several other sources.
- You can now invest pre-market and after-hours, for free.
Robinhood continues to have the most simple user interface of any investing app I’ve tested. For beginners, this can make it easy to pick up and use, plus new users receive a FREE Stock When Signing Up.
Robinhood Paid Features (Gold)
Robinhood Gold allows you to have a number of additional features, for $5 per month.
- Level II Market Data Keep tabs on the market with real-time bids and asks directly from Nasdaq.
- Invest With Margin Borrow from Robinhood so you can invest more. Greater risk, greater reward.
(Margin trading is very risky, and beginner investors should not be using it.)
- Up to $5,000.00 in Instant Deposits Increase your instant deposit limit for faster access to funds.
- Professional Research Make more informed decisions with in-depth research reports from Morningstar.
Is Robinhood Legitimate?
Robinhood is fully legal and they use Apex Clearing Corporation to clear trades and are registered with the SEC to operate in all 50 states (and 2 territories). They have Securities Investor Protection Corporation (SIPC) insurance, so your balance is protected up to $500,000 (with a $250,000 limit on cash). This is to protect against fraud, not loss of value.
How does Robinhood compare to competitors?
Robinhoods closest competitor would be WeBull, as they both started off as only mobile applications, offering free trading. While Robinhood offers an easier to use interface, Webull offers a more advanced set of features which can offer users more tools at their fingertips, but for the newer investor Robinhood is a simple platform where you can trade for $0.
There are PROS of course otherwise I would not recommend this to new investors.
- FEE FREE TRADES, Where other firms would charge you $4.95 per trade on $100 cutting your initial loss at already 4.95% Robinhood does not do that savings hundreds if not thousands of dollars when investing through them long term.
- Ability to trade Stocks, ETFs, Crypto & Options
- Simple Interface so that new investors looking at it for the first time would not feel confused (also a con, but to more senior investors)
- They do provide monthly reports that can be opened in the app and send via email to be downloaded in PDF form
- Their history is very easy to see (Buy/Sell’s & Upcoming Dividend Payouts up to a month out)
- It’s on Mobile and PC so easy to access via phone, so you can essentially buy/sell stocks while on the go.
There are of course some cons I will point out they are very sleek and minimalist so they do provide basics (account value, historical charters, stories)
- Only basic order types are supported.
- Does not offer retirement accounts.
- Very limited research tools and data available.
- No DRIP (Automatic Dividend Reinvestment)
- No trading simulator.
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