Robinhood is a free-trading app that has lately received immense popularity after members of Wallstreetbets, Reddit forums encouraged others to buy heavily shorted stocks like Nokia, GameStop, and Blackberry. The app was created by Vlad Tenev and Baiju Bhatt, who are college roommates at Stanford. After completing their graduation, they landed on Wall Street, where they were hit with a reality that changed their lives. They encountered big firms paying nothing in trades, yet they were making a ton of profit from the hefty commissions they charged investors.
Apps like Robinhood never force users to trade, and unlike other apps, they can be used responsibly. According to critics, Robinhood tends to gamify investing by sending regular push notifications to uses about the stock positions of the individual. The app is hosted as a website as an app that offers stock tips and trading tools. The app might have started as an investing platform for beginners. Instead, it has transformed into a full-fledged banking and investing platform. You can find more crucial details from professional finance assignment help forums. In addition, the app released its first cash management account called Robinhood Spend, which includes:
- Mastercard debit card
- No hidden fees
- 75,000+ free ATMs
- FDIC insurance
- 3% on total account balance
What Makes Robinhood App so Popular Among People?
- Streamlined interface
The Robinhood app is easier to use as compared to other apps. Some people have made complex trading strategies like options trading too accessible for inexperienced users. The trimmed-down interface is perfect for you if your true purpose is to dabble in stocks.
Even though the offerings of Robinhood are not as robust as other brokerages, but it is still famous for being one of the lowest costs in the industry.
- IPO access
Robinhood app revealed a new feature called the IPO Access in 2021 that allows users to participate in the company’s initial public offering or IPO. Financial institutions have typically researched IPO. You can now easily buy shares in new companies before the stock starts trading on public exchanges. You do not need any special status requirement or minimum balance to get started. All you require is a Robinhood account.
- Let’s you get access to any piece of stock
People do not have to feel intimidated by the thought of investing because they no longer require thousands of dollars to start. Robinhood’s fractional share lets you own even the most expensive stocks with as little as $1.
- Best for experienced investors
Experienced investors ready to step up their investing game can try Robinhood Gold, a premium membership. Robinhood Gold allows you to get access to:
- Level II market data
Right from NASDAQ, you will be able to look at multiple bids and then instantly ask prices for any given stock.
- Investing on margin
While investing on margin, make sure to gain financial leverage and extra buying power.
- Professional research
Avail in-depth research reports from Morningstar on more than 1,700 stocks,
- Bigger instant deposits
Depending on your account balance, you may access $5,000 to $50,000 instantly.
- They just went public
Since it debuted on the NASDAQ on July 29, 2021, under the ticker symbol HOOD, Robinhood officially went public. At $38 per share, it sold IPO shares beforehand, thus raising almost $ billion. As of August 6, 021, its current trading is $55.
Where Does Robinhood Fall short?
- Limited customer support
Its lack of bonds and mutual funds makes it difficult to build a truly diversified portfolio.
- No retirement accounts
The Robinhood app-only offers taxable brokerage accounts. You might miss out on tax benefits of retirement accounts like traditional and Roth IRAs if you keep the money for long-term I here or hoping to save for retirement. As most investors know, investing through a taxable brokerage account must come only after starting the funding, like a retirement account.
In the aspect of reliability, Robinhood has received criticism for trade restrictions and untimely outages amid market volatility. It was even accused of misleading customers by the regulators, which resulted in significant fines.
Is Robinhood Right for You?
Robinhood is the best choice if the ability to trade cryptocurrency or streamlined trading platforms is important to you. In addition, plenty of online brokers have joined Robinhood for offering commission-free trades. This lets casual investors afford or shop for a broker that suits them in the best way. Furthermore, Robinhood is a member of SIPC, and thus, funds on Robinhood are protected up to $250,000 for cash claims and $500,000 for securities. Therefore, one can say Robinhood is safe.
Robinhood is a popular investing app that pioneered free trading. Their main pitch is users can make unlimited free trades. The credit to the success of the app completely goes to the easy-to-use interface. It made the stock market more accessible to individual investors.
AUTHOR BIO: Henry Tesfaye is a marketing consultant who loves to keep up-to-date with the latest trends and technologies. He is also associated with Allessaywriter.com, where he offers finance and economic-related homework help solutions to students.