Earlier quoted context omitted.
At the end of the day, you can't live in a stock.
but it does still exist
Unless it's BSC you bought...
Or LEH...
Or...
Robinhood stock trading app confirms $110M raise at $1.3B valuation
361–370 of 394 posts
Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation
#362Enticing 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…
They're 50/50 bets.
"Sophisticated investors" aren't doing any better.
Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation
#363Earlier quoted context omitted.
What are your thoughts on RH being mobile only and how that affects your ability to manage this amount of money. Isn't it hard to keep track of your positions, performance, etc with all those taps and lack of ability to export or read on a real device?
It bugs the crap out of me that they don't integrate with other services like Mint. Right now I do a few things. I manually track my position using personal capital (I can't recommend this service / app enough for tracking ALL of your investments and planning for your future). It is kind of like mint, but exclusively for your investments ( https://www.personalcapital.com/ ) I've written a fair bit of code (python) to…
I've been retargeted by Personal Capital on FB for several months now. Are you recommending the "free financial tools" from Personal Capital? I sort of assumed the "free" was just there to entice you into paying for their wealth management services which look like every other robo but with higher fees.
Are the tools actually good? Several low-cost robos (Wealthfront and Betterment) now have fairly good retirement planning interfaces which take your outside accounts into consideration and Mint has investment tracking now as well.
Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation
#364Earlier 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.
> 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…
I agree that the GP missed the criticism, but…
That's not how margin trading works. It is a loan, but it's collateralized against your existing holdings. Most institutions will only loan you a percentage of your existing holdings (somewhere between 30% and 50%). Additionally, if the market value of your existing holdings dips such that the total loan amount is greater than the maximum percentage loan, those assets can (in most cases) be immediately sold to pay back the loan. This is called a "margin call".
To use your example, if you were using margin from an institution that allows for a 50% rate, in order to get that $10k loan, you'd have to already have $20k available in a relatively liquid assets (stocks, bonds, ETFs, mutual funds). If the value of your holdings ever dipped such that you held less than $20k, thus making your loan greater than the institutions 50% limit, some of those assets would be sold to pay down the loan.
There are additional safety measures built into margin accounts by brokers that offer them such as ensuring that the collateral assets aren't 100% allocated a single risk prone stock for example. Margin is a very well understood and safe business model for many brokers.
My understanding of the criticism of the GGP is not that Robinhood's business model is unsafe for Robinhood, it's that it's unsafe for their target market (casual stock traders). The idea is that casual trading is, for most of the population, gambling. Depending on your moral stance on gambling, using "free trades" as a marketing funnel for loans designed to be used for gambling falls somewhere between grey and repugnant.
Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation
#365Earlier quoted context omitted.
Yup. Exactly this. Some measures suggest the current bubble is even bigger than the one in 1999. Or at least more broadly carried, in the sense that in 1999 the bubble was limited to a fairly narrow range of tech stocks. This time it's all over the place. It's not limited to a few stocks. It's not even limited to the broader stock market or to subprime credit. Today even government bonds are in a very special place.…
The difference however, is that interest rates were 5.5% in 1999. They currently sit below 1% (and it's been almost 10 years where they've been below that level). Interest rates are lower for longer than they've ever been in US history. And interest rates are extremely influential.
That's what I mean by government bonds being in a special place; like a balloon pushed underwater by the ever escalating central banking interventions of the last decades.
And it's not just in US history, we may be talking about all of history. And not just on the short end. In 2016, a country like Belgium, where the government has huge unfunded liabilities, was able to borrow on 10yrs for around 0.2%. Japan is even worse.
The price of all credit ultimately relates back to these bonds. That's why the entire financial market is setting new records, for the 3rd time in 20 years. That's why in some sectors being profitable is once again not being considered as important as various metrics of "growth potential". And, to get back to Robinhood, that's why they can offer margin trading rather cheaply to the masses.
It's a massive bubble, and some comments here reflect that. The only thing we can't know is when it finally pops and where the epicentre will be this time.
(My guess would be somewhere in the nexus between ETFs and the bond market. Throw in bipolar, on/off liquidity and high volatility-of-volatility caused by modern versions of program trading-style hedging and HFT and you can have a panic with a whole new look and feel.)
Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation
#366Earlier quoted context omitted.
> Robinhood also earns money from rebates its gets for directing its order flow to broker dealers So they're selling some data (as opposed to running directly on an exchange, without any intermediaries). Or maybe not "selling" in the strict sense (I give you data, you give me money), but in an indirect way (I give you data, and you give me discount on your other services).
I give you data, and you give me discount on your other services That's not what rebate means in this context. It is, in fact, actual money. Robinhood also isn't just giving someone data. They're sending order flow to various market makers. Not data about the orders but the actual flow in need of execution.
But that's exactly the point; that flow is data, and it's valuable, especially to market makers. If it weren't, they wouldn't be paying for it...
Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation
#367Earlier quoted context omitted.
I used the term as it was originally intended, to describe an age group in the context of marketing a product. Robinhood's massive growth is being driven largely by their target of "millennials" (ie. young adults) coming to the platform without any allegiances to legacy brokers. The millennial customer base is one of the reasons cited for their valuation, since legacy brokers have had trouble gaining younger customer…
You do know that the oldest millennials are turning 37 this year?
And a lot of the oldest boomers are now dead. If your point is that time only moves in one direction, yes I agree ;)
FYI, in the context of traditional brokerage houses (and in most places outside the valley) a 37-yr old is still a "young" customer.
Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation
#368Earlier quoted context omitted.
You do know that the oldest millennials are turning 37 this year?
And a lot of the oldest boomers are now dead. If your point is that time only moves in one direction, yes I agree ;) FYI, in the context of traditional brokerage houses (and in most places outside the valley) a 37-yr old is still a "young" customer.
That may be true, but you're comment wasn't written in the context of a traditional brokerage firm was it?
Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation
#369Earlier quoted context omitted.
Just so they offer some form of betting against the market. I don't care how. Creating beta-neutral systems with Robinhood would then be possible.
(Not trading advice, yada yada) Well, The way I approach betting against the market is inverse leveraged ETFs. If you want to bet against S&P 500, ProShares has a 2X inverse offering, and you can probably balance it with 3x leveraged gold JNUG / JDST as they track the market.
Nice, I never knew inverse ETFs existed. Thanks for this!
Re: Robinhood stock trading app confirms $110M raise at $1.3B valuation
#370Earlier quoted context omitted.
Is that Base Rate something specific to them? Because it's a goddamned travesty for a pretty well secured loan.
Take a look at these broker's rates for comparison: https://www.scottrade.com/investment-products/interest-margi... https://www.fidelity.com/trading/advanced-trading-tools/marg...
Yeah. Then you compare it to what IBs are charging actual funds...