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Robinhood stock trading app valued at $1.3B with big raise from DST

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Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#21

Post by RickS »

jzwinck wrote: post #19
nodesocket wrote: post #15

I use Robinhood in tandem with my traditional online brokerage and love it. The Robinhood iOS interface is really excellent, though they provide way less technical tools and analysis than my traditional online brokerage. However this is to be expected since Robinhood is targeting non-pro/power users. Trade execution time and preference has actually been solid on Robinhood, though untested in a highly volatile situati…

I read your post and am left with two questions. 1. Robinhood Gold interest is 6%. Interactive Brokers is 2.4% [1]. Why do you think there is such a massive difference, and would anyone benefit from paying it? 2. Your analysis works on ten years of data from 2007 to 2017. Did you know that is a very positive period and that shifting it by a few years would completely change the analysis? [2] I'm not surprised you sto…

> 1. Robinhood Gold interest is 6%. Interactive Brokers is 2.4% [1]. Why do you think there is such a massive difference, and would anyone benefit from paying it?

I've used IB (and don't use robinhood). The IB GUI is a fucking trainwreck. If design had ethical obligations the way bridge engineering does, IB's designers would be in prison. It is bad. And it's still one of the better trading interfaces. Ever seen a bloomberg terminal?

That jump from 2.4 to 6% is effectively a "regular people can make sense of this without wanting to kill themselves" markup. No different from the markup any other SaaS company puts on "run this 10 line script periodically". One can sell convenience.

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#22

Post by nodesocket »

jzwinck wrote: post #19
nodesocket wrote: post #15

I use Robinhood in tandem with my traditional online brokerage and love it. The Robinhood iOS interface is really excellent, though they provide way less technical tools and analysis than my traditional online brokerage. However this is to be expected since Robinhood is targeting non-pro/power users. Trade execution time and preference has actually been solid on Robinhood, though untested in a highly volatile situati…

I read your post and am left with two questions. 1. Robinhood Gold interest is 6%. Interactive Brokers is 2.4% [1]. Why do you think there is such a massive difference, and would anyone benefit from paying it? 2. Your analysis works on ten years of data from 2007 to 2017. Did you know that is a very positive period and that shifting it by a few years would completely change the analysis? [2] I'm not surprised you sto…

IB is a great platform (though their design and tech suck), but by far offer the best margin rates. They are geared towards professionals though, and I think lots of people just don't know about them.

So 2008, the great recession was a very positive period? Ok, here are QQQ returns starting at 2003:

  2003 - 49.61%
  2004 - 9.49%
  2005 - 1.23%
  2006 - 6.81%
If you want to be bearish and hunker down in your bunker that is fine, but claiming that over 14 years of results is not a fair sample size is a stretch.

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#23

Post by whitepoplar »

nodesocket wrote: post #16
whitepoplar wrote: post #6

I think what Robinhood is doing with Gold accounts is pretty shady. I'm guessing that the vast majority of people who trade on margin don't fully comprehend the risks in doing so.

It's not rocket science, and it is obviously a loan. How is margin shady? This claim that it is somehow predatory or that consumers need to be protected is nonsense. This assumes that people can't do research and due diligence. If you aren't informed to make financial decisions than you probably shouldn't be trading. If you choose to proceed, do so at your own risk. All brokerages offer margin and typically this is h…

Margin isn't shady in the form that it takes at every other brokerage. Robinhood's Gold is shady because they make every attempt to market it as a higher membership tier, to young unsophisticated investors. It may not be illegal, but it certainly seems like a dark pattern.

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#24

Post by trhaynes »

RickS wrote: post #21
jzwinck wrote: post #19

Earlier quoted context omitted.

I read your post and am left with two questions. 1. Robinhood Gold interest is 6%. Interactive Brokers is 2.4% [1]. Why do you think there is such a massive difference, and would anyone benefit from paying it? 2. Your analysis works on ten years of data from 2007 to 2017. Did you know that is a very positive period and that shifting it by a few years would completely change the analysis? [2] I'm not surprised you sto…

> 1. Robinhood Gold interest is 6%. Interactive Brokers is 2.4% [1]. Why do you think there is such a massive difference, and would anyone benefit from paying it? I've used IB (and don't use robinhood). The IB GUI is a fucking trainwreck. If design had ethical obligations the way bridge engineering does, IB's designers would be in prison. It is bad. And it's still one of the better trading interfaces. Ever seen a blo…

Access to a good GUI should cost a flat rate, not a %.

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#25

Post by jzwinck »

RickS wrote: post #21
jzwinck wrote: post #19

Earlier quoted context omitted.

I read your post and am left with two questions. 1. Robinhood Gold interest is 6%. Interactive Brokers is 2.4% [1]. Why do you think there is such a massive difference, and would anyone benefit from paying it? 2. Your analysis works on ten years of data from 2007 to 2017. Did you know that is a very positive period and that shifting it by a few years would completely change the analysis? [2] I'm not surprised you sto…

> 1. Robinhood Gold interest is 6%. Interactive Brokers is 2.4% [1]. Why do you think there is such a massive difference, and would anyone benefit from paying it? I've used IB (and don't use robinhood). The IB GUI is a fucking trainwreck. If design had ethical obligations the way bridge engineering does, IB's designers would be in prison. It is bad. And it's still one of the better trading interfaces. Ever seen a blo…

I agree the IB UI has lots of room to improve.

> Ever seen a bloomberg terminal?

I helped build it. Sorry.

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#26

Post by wocram »

ryankennedyio wrote: post #18

Does Robinhood sell retail order flow on? I've read conflicting views both ways, but can't really see how they'd make any money if they didn't. I think the way it's being promoted is a bit dangerous though. It seems like they're promoting to the exact market that really, really shouldn't be flipping stocks (and promoting use of margin to do so). Interactive brokers is what, a few bucks a trade anyway? Something aimed…

Literally all retail brokers are getting paid by a citadel for their orders.

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#28

Post by Veratyr »

ryankennedyio wrote: post #18

Does Robinhood sell retail order flow on? I've read conflicting views both ways, but can't really see how they'd make any money if they didn't. I think the way it's being promoted is a bit dangerous though. It seems like they're promoting to the exact market that really, really shouldn't be flipping stocks (and promoting use of margin to do so). Interactive brokers is what, a few bucks a trade anyway? Something aimed…

> Interactive brokers is what, a few bucks a trade anyway?

IB Commission is $0.005 per share, with a minimum of $1 total. The problem with IB for regular folks is a bunch of monthly fees if you don't have enough activity each month.

https://www.interactivebrokers.com/en/index.php?f=1590&p=sto...

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#29

Post by charlesdm »

whitepoplar wrote: post #11
benbowdene wrote: post #9

Earlier quoted context omitted.

I agree. Especially when most of their user base is probably millennials who are < 2 years into trading. A bit scary.

It's so bad. If you offered the same people a loan at x% annual interest rate, I bet far fewer of them would bite, but that's exactly what the Gold monthly fee is.

At $10/mo (=$120 year), assuming a 1.5% interest rate, you're actually saving money on interest expenses if you invest more than $10k on margin for > 1 year. Doesn't sounds that bad to me?

Re: Robinhood stock trading app valued at $1.3B with big raise from DST

#30

Post by state_less »

nodesocket wrote: post #15

I use Robinhood in tandem with my traditional online brokerage and love it. The Robinhood iOS interface is really excellent, though they provide way less technical tools and analysis than my traditional online brokerage. However this is to be expected since Robinhood is targeting non-pro/power users. Trade execution time and preference has actually been solid on Robinhood, though untested in a highly volatile situati…

Well if a humdrum ~%25 correction wipes out half your capital. Then you'll be hoping for a massive 50% run in the market to get back to where you started.

I'd want to get paid more than 9.74 - 6 = 3.74 percent to ride that rollercoaster.

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