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

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

#231

Post by artursapek »

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…

I can confirm that Fidelity has a great checking account (they call it a "cash management account"). They cover all of my banking & investing needs - they even have a 2% cash back credit card that's pretty great.

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

#232

Post by mighty_atomic_c »

bcohen5055 wrote: post #187
Infernal wrote: post #184

Earlier quoted context omitted.

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…

I'm a current robinhood non-gold user and they actually eliminated this restriction around 6 months ago. Now as soon as I sell a position I can buy my next with the funds from the sale.

Yes, I have this too. Robinhood Instant is a margin account, with the same conditions/restrictions as a Gold account. They loan you money in that settlement time window, basically

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

#233

Post by protomok »

slimsag wrote: post #182
protomok wrote: post #173

Earlier quoted context omitted.

Here's an example of how badly active funds underform passive funds: 'Given that active managers’ performance can vary based on market cycles, the newly available 15-year data tells a more stable narrative. Over the 15-year period ending Dec. 2016, 92.15% of large-cap, 95.4% of mid-cap, and 93.21% of small-cap managers trailed their respective benchmarks.' [1] The question folks need to ask is this - Will my stock tr…

I use Robinhood for passive funds. VOO, VYM, UPRO, SHY, etc.

Nice, I would probably use it the same way.

Would you know if Robinhood supports pre-authorized purchase plans? For example the ability to buy x shares of VOO on the first day of each month automatically? I didn't see anything on the FAQ but maybe I missed it. Pre-authorized purchase plans + no commissions could be interesting.

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

#234

Post by webninja »

beezle wrote: post #193

Their margin rates are very high at best and potentially usury at worst. They are counting on you not using the full amount of margin on the tier you paid for and further, counting on you being too lazy to downgrade to a lower (or no) tier when you no longer need it. There was nothing I could find in the FAQ about them automatically dropping the tier as your use declined. For comparison - and I have no vested interes…

My Robinhood margin rate for $6,000 is only 5%/year. It also provides extended pre-market trading, after-market trading, and instant deposits. Interactive brokers charges commissions on trades. Also you don't have to use margin with Robinhood, it's not required.

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

#235

Post by tekromancr »

duren wrote: post #170

I have a modest amount of money in Robinhood. I love the app and they way it has encouraged me to learn about markets. I started in March of 2016. I was naïve and I made a lot of silly mistakes early on, but I was able to learn a lot of fundamentals when the stakes were low. I view it more as a gaming app than investing — it's a supplement, not a replacement for investing and asset management.

Absolutely! The app lives in my phone's "games" folder. I have a relatively small amount of money, just enough that it would sting a bit if I lost it all. I find that even having a tiny stake in things makes learning about investing and finance actually interesting, whereas the majority of my invested assets are all "Vanguard, take the wheel"

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

#236

Post by dnautics »

nolok wrote: post #122
lend000 wrote: post #115

Earlier quoted context omitted.

Wouldn't want to enable people to make their own decisions with their money, would we? The fact that you have to make a paid account to use leverage (whereas you can trade indefinitely for free) is deterrent enough for most people who do not already actively manage their investments. I think Robinhood is doing a great service -- I just wish they would expose a better API.

Unless I misunderstood him, he's not complaining that people can make their own decisions with their money, aka that anyone can use this service even if they're not well versed in that field, he's complaining that Robinhood entire business model is based on pushing the very users who don't know how to use it in a sane way, to do it anyway. That will be the company's lifeline, as its way to make money. I can see the b…

100% agree that depending on people going into margin for monetization is a poor alignment of incentives. The humorous thing to me, is that being aligned with forcing people into leverage is an apt description of the economy at large.

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

#237

Post by rtx »

nolok wrote: post #122
lend000 wrote: post #115

Earlier quoted context omitted.

Wouldn't want to enable people to make their own decisions with their money, would we? The fact that you have to make a paid account to use leverage (whereas you can trade indefinitely for free) is deterrent enough for most people who do not already actively manage their investments. I think Robinhood is doing a great service -- I just wish they would expose a better API.

Unless I misunderstood him, he's not complaining that people can make their own decisions with their money, aka that anyone can use this service even if they're not well versed in that field, he's complaining that Robinhood entire business model is based on pushing the very users who don't know how to use it in a sane way, to do it anyway. That will be the company's lifeline, as its way to make money. I can see the b…

Most lifestyle business have similar revenue models. We shouldn't just object against one company.

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

#238

Post by rtx »

theseatoms wrote: post #198
AndrewKemendo wrote: post #123

Earlier quoted context omitted.

Except it's credit, not their own money, so your naiive "how people spend their money has no consequences" attitude, doesn't hold water. That's the whole point.

Sure. It's Robinhood's money, which they're choosing to lend to their customers. So Robinhood can bear the consequences if the loan can't be repaid. (As others have pointed out, they have ways to protect themselves. Margin calls, forced liquidations, etc)

Another more clever way is to deliver shares from their own pool.

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

#239

Post by pembrook »

artursapek wrote: post #230
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…

Buying indexes is definitely safer than individual stocks, but also leads to lower returns over the long term compared to winning stocks. Also, they only go up while the market is going up. If you're just betting on the market, might as well buy and hold something like XIV and get higher returns/pay no fee on it.

This comment is so wrong I don't even know where to begin.

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

#240

Post by mabbo »

lend000 wrote: post #166
mabbo wrote: post #158

Earlier quoted context omitted.

> Wouldn't want to enable people to make their own decisions with their money, would we I think you're missing what the criticism here is. Let's say you, right now, have $10,000. I say "Hey, lend me that money so I can play the stock market with it." Would you give me the money? You know literally nothing about me. You don't know if I've ever traded a stock before. You don't know if I can ever pay you back. There's a…

> Robinhood is taking on a lot of risk and using that as proof that they're a profitable company. Margin positions are typically liquidated when they go negative. At worst, the customer owes Robinhood some leftover slippage after their margin gets called. And typically, margins are called before your account goes negative.

I agree, it's not as risky as it might be. But there's still something unsettling about lending money to people to gamble with.
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