Robinhood App Overview 2024 – Free Inventory, ETF, and Crypto Trades


Robinhood
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Robinhood Logo 2024

Product Identify: Robinhood

Product Description: Robinhood is an internet dealer providing an easy-to-use cell app and free inventory, ETF, crypto, and choices trades.

Abstract

Robinhood is an internet dealer providing an easy-to-use cell app and free inventory, ETF, crypto, and choices trades. However you may’t purchase or promote mutual funds or fixed-income investments, similar to bonds. Its inventory evaluation and market analysis instruments are additionally very restricted, making it much less appropriate for superior merchants. 

Professionals

  • Fee free trades
  • No account minimums 
  • Nicely designed interface 
  • Now gives retirement accounts 

Cons

  • Can’t commerce mutual funds or bonds 
  • Restricted inventory evaluation and market analysis 
  • No quick promoting 

Robinhood is an internet brokerage that has turn out to be standard for its commission-free trades and easy and clear consumer interface that makes inventory and ETF buying and selling straightforward. Robinhood additionally gives choices and crypto buying and selling, fractional shares, retirement accounts, and a money again debit card.

However Robinhood isn’t with out its detractors. Robinhood has been criticized for gamifying investing and drawing newbie traders into dangerous buying and selling actions. And the Robinhood platform lacks most of the in-depth analysis and evaluation instruments present in different prime brokerages.

At A Look

  • Fee-free inventory, ETF, and choices trades
  • No account minimums
  • Fractional share buying and selling
  • Free crypto buying and selling
  • Conventional and Roth IRAs can be found
  • Money again debit card (spending account) with no month-to-month or overdraft charges
  • Early entry to direct deposit

Get Began with Robinhood

Who Ought to Use Robinhood?

Robinhood is good for newbies because it’s straightforward to make use of and has no charges or account minimums. Nonetheless, you should be cautious to keep away from falling into lively buying and selling patterns, which might be harmful.

Extra skilled traders will admire that you could purchase $1 fractional shares of shares and exchange-traded funds when many conventional brokers nonetheless require buying entire shares.

However in the event you’re in search of a extra passive funding technique or need entry to in-depth funding analysis instruments, you’re higher off trying elsewhere.

Robinhood Options

Desk of Contents
  1. At A Look
  2. Who Ought to Use Robinhood?
  3. Robinhood Options
  4. What Is Robinhood?
  5. Greatest Robinhood Options
    1. Free Inventory and ETF Buying and selling
    2. Robinhood Crypto
    3. Robinhood Choices
    4. Robinhood Retirement
    5. Robinhood Gold
    6. Robinhood Money Card
  6. How does Robinhood generate income?
  7. Easy methods to Get Began with Robinhood
  8. Is Robinhood Protected?
  9. What I Like About Robinhood
  10. What I Don’t Like About Robinhood
  11. Robinhood vs. Constancy
  12. Robinhood vs. Public
  13. Robinhood vs. SoFi Make investments
  14. Robinhood vs. WeBull
  15. FAQs

What Is Robinhood?

Robinhood Logo 2024

Robinhood launched its standard inventory buying and selling app in 2015 and was one of many first on-line brokerages to supply commission-free trades.

Since then it’s expanded its product providing to incorporate crypto buying and selling, retirement accounts, and a handy spending account.

As of 2022, Robinhood had roughly 23 million members. Robinhood is a legit buying and selling platform. It’s a member of the Monetary Trade Regulatory Authority (FINRA) and has Securities Investor Safety Company (SIPC) insurance coverage, so your steadiness is protected as much as $500,000 (with a $250,000 restrict on money). That is to guard towards fraud, not the lack of worth.

Stock Ticket Prize

Robinhood Free Inventory Provide

For a restricted time, Robinhood gives a free share of inventory (valued between $5 – $200) while you open an account via a hyperlink on our web site. There is no such thing as a deposit required and no account upkeep charges to fret about.

Click on the hyperlink under and revel in your free inventory share!

Get Began with Robinhood

Greatest Robinhood Options

Right here’s a more in-depth have a look at the principle options Robinhood has to supply.

Free Inventory and ETF Buying and selling

With Robinhood, you should purchase or promote most particular person shares and ETFs that commerce on the U.S. inventory exchanges. Robinhood additionally gives fractional investing, so you should purchase partial shares for as little as $1 at a time fee-free, making it straightforward to afford dearer shares whereas sustaining a various portfolio.

Robinhood Invest

A number of the instruments obtainable to all traders embrace:

  • A number of order sorts: The default is to put market orders (purchase or promote on the present buying and selling value), however you too can select restrict orders (commerce executes inside a selected value vary).
  • Worth chart: Whereas Robinhood’s analysis instruments are restricted, you may view a fundamental historic inventory chart for a possible funding.
  • Scores: Robinhood lets you view a consensus of what number of inventory analysts are bullish or bearish. The platform additionally exhibits fundamental monetary knowledge, information headlines, and comparable shares.
  • Inventory lending: Lengthy-term traders can enroll within the Robinhood Inventory Lending program to earn curiosity by lending their shares to margin merchants. 
  • Prolonged hours buying and selling: Whereas most traders can solely purchase or promote shares and funds throughout regular market hours when liquidity is at its highest, the Robinhood 24-Hour Market lets you commerce lots of your favourite shares between Sunday @8PM EST and Friday @ 8 PM EST. It’s essential to notice that there are elevated dangers to buying and selling outdoors market hours, which Robinhood covers in its Prolonged Hours Buying and selling Disclosure.

Robinhood additionally gives many OTC and ADR inventory symbols that allow you to commerce penny shares with skinny liquidity and buying and selling costs under $5. Often, you’ll want to use a standard on-line brokerage like E*TRADE, Constancy, or Schwab to purchase or promote these tickers.

Sadly, you can not purchase or promote foreign-listed shares that commerce instantly outdoors the USA. For instance, you can not purchase Nintendo inventory from the Tokyo Inventory Change — you would need to buy the US-listed NTDOY share as a substitute.

Robinhood Crypto

You’ll be able to commerce a number of standard cryptocurrencies commission-free on the Robinhood trade, together with BTC, ETH, DOGE, SHIP, AVAX, UNI, ETC, LINK, XLM, AAVE, and extra. In line with Robinhood, most of its prospects’ cash are held offline, in chilly storage, for added safety.

You too can switch your crypto to and from Robinhood to different crypto wallets, with out incurring any deposit or withdrawal charges.

Robinhood claims cryptocurrency buying and selling via its platform is cheaper than devoted crypto exchanges, similar to Coinbase, Kraken, and Crypto.com. Nonetheless, most crypto exchanges provide extra token choices and make storing the precise token keys simpler.

Robinhood Choices

Skilled traders* can apply to open a Robinhood Choices buying and selling account. There are not any fee charges on trades or choices contracts.

To get began, you’ll should open and fund your Robinhood account and choose the Choices buying and selling choice in account settings. You’ll want to supply extra monetary data and reply questions on your funding expertise.

Robinhood Options Trading

Robinhood approves choices buying and selling at two ranges: Degree 2 and Degree 3. Degree 2 can accommodate fundamental choices buying and selling methods, whereas Degree 3 permits for extra complicated methods.

Robinhood gives the next choices buying and selling options:

  • No commission-fees on trades or choices contracts
  • Superior charts (monitor and modify Shifting Common (MA), Relative Energy Index (RSI), and extra
  • Technique Builder helps you to construct vertical spreads, calendar spreads, strangles, straddles, and extra.
  • Watchlist helps you to save and monitor choices contracts with out buying and selling
  • Commerce choices in a Robinhood IRA account
  • Change and regulatory charges could apply

* After a tragic demise of a younger Robinhood investor in 2020, the brokerage has applied a number of safeguards to assist customers handle threat with choices buying and selling. Regardless, choices buying and selling stays unsuitable for inexperienced traders, who’re higher off sticking to conventional, long-term funding methods.

Robinhood Retirement

With the launch of Robinhood Retirement in 2023, now you can open a tax-advantaged conventional and Roth IRA. This new characteristic provides worth to Robinhood as traders can use it for short-term and long-term investing.

Robinhood makes it straightforward to switch from exterior accounts. This consists of transferring an present IRA or rolling over an previous 401(okay). Whenever you switch, Robinhood can pay 1%, with no cap, on prime of the switch quantity. Observe that you could commerce choices in a Robinhood IRA account.

Gold subscribers with an IRA account will obtain a 3% IRA match on all eligible contributions for a restricted time. contributions. Provide expires April 30, 2024. Phrases and circumstances apply.

Robinhood Gold

Robinhood gives an non-compulsory month-to-month subscription referred to as Robinhood Gold that unlocks a number of premium advantages for $5/month after a 30-day free trial.

You’ll obtain the next advantages on non-retirement brokerage accounts:

  • $5 month-to-month
  • 5% APY your uninvested money (vs. 1.5% for non-Gold members)
  • 8.00% margin account rate of interest (12.00% with out Gold)
  • Make Greater Immediate Deposits of as much as $50,000 ($1,000 restrict for non-Gold)
  • Entry to Morningstar skilled analysis ($249 annual worth)
  • Nasdaq Degree II market knowledge

Robinhood Money Card

The Robinhood Money Card is a pay as you go debit Mastercard issued by Sutton Financial institution, an FDIC member. It replaces Robinhood’s Money Administration product, which is not obtainable to new prospects. The Robinhood Money Card is free and will assist enhance your financial savings and spending energy. 

This account is just like a rewards checking account and consists of the next advantages:

  • A round-up financial savings characteristic helps you to make investments routinely while you spend.
  • Schedule recurring funding contributions out of your paycheck
  • Early entry to your direct deposit
  • Earn money again at collaborating shops
  • As much as $250,000 in FDIC Insurance coverage (that is pass-through protection from accomplice banks)
  • Mastercard Zero Legal responsibility Safety

Get Began with Robinhood

How does Robinhood generate income?

That is the million-dollar query – how can an organization making a gift of free trades generate income? One clue is from the non-compulsory Robinhood Gold service, which prices $5 month-to-month. Nonetheless, premium subscriptions alone can’t energy one of many world’s busiest investing apps with tens of millions of accounts.

Robinhood offers the reply within the FAQ part of its web site. Listed below are the varied ways in which Robinhood makes cash:

  • Cash off order stream (a rebate that exchanges give for offering liquidity)
  • Robinhood Gold subscriptions
  • Curiosity from margin buying and selling accounts
  • Inventory loans
  • Curiosity from uninvested money
  • Money administration accounts

It’s attainable to commerce shares and funds 100% free on Robinhood. Nonetheless, a “hidden value” is order stream buying and selling. Particular person merchants place a commerce with out paying charges, however simply earlier than the commerce is executed, the market maker may pay a small fee to the app for routing the order via their trade. Whereas this apply is questionable, many free apps use the identical execution high quality to generate earnings. 

Easy methods to Get Began with Robinhood

You’ll be able to enroll with Robinhood on-line via its internet platform or by downloading the Android or iOS cell app. New customers may obtain one free inventory after the signup course of.

I signed up on my pc fairly than my cellphone as a result of I’d fairly not kind in a bunch of account data on a tiny keyboard. The sign-up course of takes about 5-10 minutes and also you’ll want to supply some fundamental data – identify, handle, Social Safety, birthday, and different demographic data.

You’ll even be prompted to hyperlink up your checking account via Plaid and switch funds into your account. You’ll be able to hyperlink most financial institution accounts via this third-party service utilized by tons of of non-public finance apps to keep away from storing your login credentials on their servers. 

You too can switch belongings into Robinhood and be reimbursed as much as $75 per account in transfer-out charges that your previous brokerage costs you. When you enroll, it’s time to log in, and also you’re off to the races.

Is Robinhood Protected?

In brief, Robinhood is protected.

Since it’s a dealer, it’s regulated by the SEC (Securities and Change Fee) and is required to have security measures just like different brokers. For instance, Robinhood has SIPC insurance coverage of as much as $500,000 for securities and $250,000 on money.

Robinhood can also be regulated by FINRA. You’ll be able to look them up on BrokerCheck beneath CRD# 287900. When you do, you’ll see they’ve been authorized since 10/13/2017 and at present have two disclosures.

In addition they have applied a number of safety measures to guard your knowledge. Your password is hashed utilizing the BCrypt hashing algorithm. Delicate data like your Social is encrypted earlier than storage.

Communications are encrypted utilizing Transport Layer Safety protocol (TLS), and Robinhood gained’t retailer your banking credentials as soon as they’ve been authenticated. As a substitute, they’re saved as entry tokens via third-party integration.

Lastly, Robinhood employs an non-compulsory two-factor authentication on its app.

Get Began with Robinhood

What I Like About Robinhood

  • The free trades. You’ll be able to place market, restrict, cease loss, and stop-limit orders on U.S. shares and ETFs with out fee charges. You too can commerce crypto and choices commission-free.
  • Fractional shares. Robinhood helps you to purchase slices of any inventory or ETF. The minimal funding is simply $1, decrease than many rivals that require you to put not less than a $5 per commerce.
  • Intuitive buying and selling dashboard. Robinhood does the whole lot attainable to make the buying and selling expertise user-friendly. Whenever you log in, you’re greeted along with your account worth, some historic charts, and related tales in a slider on the backside. Inexperienced in the event you’re up, pink in the event you’re down.
  • You will get entry to some pre-IPO shares. Robinhood will periodically e mail accountholders when there are alternatives to buy pre-IPO shares. It will likely be a small collection of shares and gained’t be each firm that can IPO, however it’s higher than nothing. (Technically, these are gives on the open, so not technically “pre-IPO,” however fairly shut)
  • Robinhood Retirement: I like that Robinhood has added retirement accounts to its product lineup. It can save you for retirement with a tax-deferred or tax-free IRA. It’s additionally attainable to obtain a 1% matching deposit.
  • Dividend Reinvestment Plan (DRIP): Robinhood helps you to routinely reinvest your dividend earnings from shares and ETFs. DRIP investing doesn’t require a minimal funding.

What I Don’t Like About Robinhood

  • No help for mutual funds, bonds, or fixed-income buying and selling: You’ll be able to’t purchase or promote mutual funds or fixed-income investments, together with bonds, via Robinhood, a big disadvantage.
  • No quick promoting. This gained’t impression most traders, however Robinhood doesn’t provide quick promoting.
  • Little to no evaluation is offered. Robinhood has restricted stories and evaluation instruments. There are information notifications and historic value charts however that’s the one factor outdoors of executing transactions. Lots of the most effective low cost brokers additionally don’t cost charges however provide glorious inventory screeners, charting instruments, and analyst stories.  
  • Restricted buyer help. 24/7 help is offered by cellphone or dwell chat, however it’s possible you’ll want to attend for the dealer to contact you. Conventional brokerages are likelier to have extra brokers readily available morning or night time, significantly on unstable buying and selling days.
  • Inserting restrict orders is cumbersome. If you need a market order, the method is easy. Nonetheless, restrict orders require you to enter a value on a separate display screen. As soon as you choose a value, you decide how lengthy to maintain it open (“Good for a Day” or “Good until Canceled”), then it goes again to the order display screen, and also you full your order. After you place the commerce, if you wish to see your order, you should go to “Historical past.” You’ll be able to’t edit the order, you need to cancel it and re-enter (most brokers will allow you to “edit,” saving you the work of canceling and re-entering.

Robinhood vs. Constancy

Constancy Investments is a full-service on-line brokerage appropriate for traders of all expertise ranges. Most investing performance is offered via its internet platform. Nonetheless, you may solely commerce shares by the slice via the Constancy cell app with a $1 minimal funding. Constancy’s market analysis and evaluation instruments are extra in depth than what Robinhood gives.

Not like Robinhood, you may maintain mutual funds, bonds, and fixed-income investments with Constancy. Trades are commission-free for U.S.-listed shares, ETFs, and Constancy mutual funds. You’ll be able to commerce crypto, however you need to open a separate Constancy Crypto account.

Get the Newest Constancy Promotions

Robinhood vs. Public

Public helps you to commerce shares, ETFs, and crypto with a $1 minimal funding. And, as of February 2024, you may earn over 5% APY in your money via its high-yield financial savings account.

The app gives fundamental analysis instruments, a built-in social media platform, and the chance to put money into different belongings and U.S. Treasuries. Sadly, tax-advantaged retirement accounts usually are not obtainable. For $8/month, Public Premium gives enhanced buying and selling options, extra customer support choices, superior knowledge and evaluation, and portfolio administration.

Our Public overview covers extra of the investing app’s options. 

Get Began with Public

Robinhood vs. SoFi Make investments

SoFi Make investments helps you to begin buying and selling shares and ETFs by the slice with a $5 minimal funding. Choices buying and selling and retirement accounts are additionally obtainable. SoFi’s analysis instruments are just like Robinhood.

SoFi Make investments could also be a greater choice than Robinhood in the event you already use SoFI for its banking providers and loans. Additionally, traders who’re in search of a robo-advisor resolution could SoFi’s automated investing portfolios.  

Take a look at the newest SoFi promotions to earn bonus money with new accounts. 

Get Began with SoFi Make investments

Robinhood vs. WeBull

WeBull helps you to commerce shares, ETFs, crypto, and choices via taxable or retirement accounts just like Robinhood. Buying and selling is commission-free, and the minimal funding is $5 for fractional shares.

This service has higher charting instruments than Robinhood with many technical indicators. There’s additionally a paper buying and selling simulator. Webull not too long ago began providing money administration accounts and a robo-advisor service.

Our Robinhood vs. Webull comparability seems to be extra intently on the variations between each brokerages. Learn our Webull overview for extra.

Get Began with Webull

FAQs

Is Robinhood good for long-term investing?

If you wish to purchase and maintain particular person shares and ETFs, you are able to do that with Robinhood. You too can routinely reinvest your dividends (DRIP) and earn curiosity in your money. Nonetheless, the shortage of analysis instruments and buyer help is irritating.

Does Robinhood have retirement accounts?

Sure, Robinhood started providing conventional and Roth IRAs in early 2023. There is no such thing as a minimal steadiness requirement or service price. These accounts are eligible for $1 fractional investing and commission-free buying and selling. 

Is it a good suggestion to speculate with Robinhood?

Robinhood is good for newbies as a result of it’s straightforward to make use of and has no charges or account minimums. Skilled traders will admire the $1 fractional shares; nevertheless, the in-depth analysis instruments and lack of help for mutual funds, bonds, and different fixed-income investments are drawbacks.

Get Began with Robinhood

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