Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Robinhood stock trading app confirms $110M raise at $1.3B valuation

techcrunch.com

Post reply on HN
Print view View original

201–210 of 394 posts

Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation

#201

Post by appetizer »

AndrewKemendo wrote: post #16

“But ‘how are you going to make money long-term?’ has been a question mark” Bhatt says. Gold has answered that question.” A Gold subscription lets users borrow up to double the money in their account to trade on margin with leverage Wow, so that's effectively opening up new easy to get credit vehicles for unsophisticated investors. How could that go wrong? Even if you are a professional trader you'll take a bath on m…

Unsophisticated investors already have access to 4:1 leverage in every stock broker out there, which is quadruple the money, so you don't know what you are talking about?

Surprise! Robinhood is going to make revenues like a normal broker, who at this point already have mobile apps that are just as intuitive and more fully featured.

Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation

#202

Post by marvel_boy »

akhatri_aus wrote: post #89
marvel_boy wrote: post #14

Somebody knows if there they are planning to operate in UK?

Theres one called Freetrade.io that does the same thing in the UK

Thanks, from his portal seems that they will operat in two months.

Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation

#203

Post by jbooth »

ThrustVectoring wrote: post #194
jbooth wrote: post #178

Earlier quoted context omitted.

If you gave me a choice between running $1k through a blackjack table, or backing $1k of an unsecured loan for margin trading by a random Robinhood user, I might go for the blackjack.

The loan is secured by the assets purchased, it's not unsecured.

They're offering 2x margin, if I read the article correctly. So it's at best 1/3 secured, and probably a lot less than that if you need to make a margin call and try to collect.

The gigantic risk to Robin Hood isn't that they'll have problems collecting occasionally. They can make up for that by fiddling with their fees to come ahead in the average case.

It's that some big market move busts everyone at once and they go bankrupt overnight.

Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation

#204

Post by matwood »

Infernal wrote: post #184
AndrewKemendo wrote: post #16

“But ‘how are you going to make money long-term?’ has been a question mark” Bhatt says. Gold has answered that question.” A Gold subscription lets users borrow up to double the money in their account to trade on margin with leverage Wow, so that's effectively opening up new easy to get credit vehicles for unsophisticated investors. How could that go wrong? Even if you are a professional trader you'll take a bath on m…

As someone who has looked into but not actively used Robinhood - the main benefit of the Gold subscription is for day traders. With a free account, if I decide I want to sell AAPL and buy GOOG, I have to wait 3+ days before I get the money from selling AAPL credited to my account. With Gold, they basically let you float, so you can immediately get into a new position after getting out of the previous one, without hav…

If you're actually day trading you will still end up under SEC pattern day trading rules which require > $25k in the account. At that point, just get a real account with real tools.

http://www.finra.org/investors/day-trading-margin-requiremen...

Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation

#205

Post by stuffedBelly »

metalliqaz wrote: post #141
huac wrote: post #64

Earlier quoted context omitted.

Robinhood knows that people can just buy index funds and sit (which is what I do). But this doesn't make money, so they encourage people to buy individual stocks, "whatever new Elon Musk stock is out there", and trade on leverage. To some extent they want to make Robinhood a game, rather than an investment platform.

Wall street did that a loooong time ago

Robinwood's target audience seems to be younger generation, most of whom are not hot about investment, not to mention whether they know what Wall Street did a long time ago (aside from 2008's financial crisis).

Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation

#206

Post by pgodzin »

harryh wrote: post #103
Leader2light wrote: post #21

I use Robinhood daily and love it. Low level traders could care less if HFT are making a penny off them. Also you can put limit orders....... No way I could trade the way I do and still make money if I was paying 7$ or more per trade. Crazy the industry can charge that much.

This is a good time to trot out that old tech company adage: if you aren't paying for the product, you are the product. How does Robinhood make money? By selling order flow to market makers. Why do market makers want Robinhood's order flow? Because Robinhood's customers are, collectively, unsophisticated investor with no particular knowledge about the future performance of a stock making them the perfect customers fo…

But I am just as unsophisticated whether I am using Robinhood or Fidelity, I am just avoiding excessive fees instead.

Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation

#207

Post by matwood »

nommm-nommm wrote: post #157
pembrook wrote: post #110

Enticing millenials to "trade" individual stocks is quite possibly the most anti- Robinhood thing I can think of. The only thing more ironic would be to encourage them to take on margin...which as it turns out is literally Robinhood's business model. 99% of users on the platform will ulimately end up participating in a direct transfer of their own wealth to a more sophisticated trader or algo (i.e. The banks and hedg…

I've written this on HN before but Fidelity(1) and Schwab(2) have similar low cost index fund offerings to Vanguard as well so don't think you are stuck with Vanguard. Both Fidelity and Schwab also offer the best checking account you can possibly get (no fees, minimums, plus ATM reimbursement) for free as well. Additionally, Fidelity has a great 2% cash back credit card. Even if you don't use Fidelity or Schwab's bro…

Many VG funds are also traded as ETFs. You can buy those like any other stock. Most brokerages also have a list of commission free ETFs that can be purchased. These typically many include low cost index funds. I agree with you completely, that if someone wants to invest, open a Schwab account (the checking account is one of the best out there and free), and just do it there.

Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation

#209

Post by pikzen »

whitepoplar wrote: post #72
omarforgotpwd wrote: post #23

Earlier quoted context omitted.

Margin trading is a pretty standard feature across all brokerages. Dangerous if used ignorantly, but greatly increases you returns if used effectively.

*Dangerous if unlucky, but greatly increases your returns if lucky

As it stands, the stock market is 50% being average, 49.9999% being unlucky.

But hey, at least we're making debt available to more people.

Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation

#210

Post by webninja »

AndrewKemendo wrote: post #16

“But ‘how are you going to make money long-term?’ has been a question mark” Bhatt says. Gold has answered that question.” A Gold subscription lets users borrow up to double the money in their account to trade on margin with leverage Wow, so that's effectively opening up new easy to get credit vehicles for unsophisticated investors. How could that go wrong? Even if you are a professional trader you'll take a bath on m…

I use Robinhood and NO ONE should use margin if they don't know what a Margin Call is.

Having understood that, the effective yearly simple interest rate on my particular Robinhood margin (extra buying power) is only 5%/year so all I have to do is earn higher than a 6% return each year. This last year, my return rate was 14%, so that margin was worthwhile.

If new to investing and you aren't sure what to invest in, I suggest investing in: VTI, VYM, or QYLD depending on your risk tolerance. I'm invested in all three.

Post reply on HN