Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies • Hacker News Board

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#261

Post by notyourday » Thu, Jan 25, 2018, 10:32 PM UTC

vasilipupkin wrote: post #236

2trill2spill wrote: post #203

Earlier quoted context omitted.

> Every single retail brokerage including all the companies that charge "fees" also sell order flows to market makers. All of them. Not true, Interactive Brokers doesn't sell your order flow.

that may very well be really bad for consumers. If Robinhood sells to Citadel and Citadel has better execution than IB, you are getting worse prices on IB.

It does not work like this. You will always be crossed on NBB or NBA.

The concept of "bad" vs a national best bid or a national best ask can only come via order delay. Better execution via order delay as seen by a customer is always a lie as none of retail brokerages look at the order, look at the 100@101 x 100@101.1 market and say "ok, i'm buying 380K @ 101.09 from you" followed by posting the trade followed by trying to unwind position. Oh no, they simply present your order by adding it to the book.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#262

Post by skellera » Thu, Jan 25, 2018, 10:37 PM UTC

almost_usual wrote: post #244

Lewton wrote: post #234

Earlier quoted context omitted.

> Invested a little saved and since then made a decent return, better than if that money was in a bank. So far, I'm doing better than the large-company mutual funds after 3 years, but as I've been reading, that's probably good luck. The only thing you should be comparing yourself against is the s&p500, if you haven't beaten that, then you're down. Also, the markets have been in an unprecedented bull run. Everything y…

I believe the unprecedented bull run is also a contributor to Robinhood’s success. Most of your mobile app day traders are going to drop off when the market turns bearish.

I think many young people don’t understand this. They just think it’s guaranteed returns at this point with the amazing market and btc, etc.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#263

Post by sf_rob » Thu, Jan 25, 2018, 10:37 PM UTC

Lewton wrote: post #234

vervez wrote: post #225

Earlier quoted context omitted.

College kid who started trading in RH a while ago here. After reading some basic investment books from authors like Peter Lynch, Taleb, and What Jim Paul, decided to get some experience in the markets. Invested a little saved and since then made a decent return, better than if that money was in a bank. So far, I'm doing better than the large-company mutual funds after 3 years, but as I've been reading, that's probabl…

> Invested a little saved and since then made a decent return, better than if that money was in a bank. So far, I'm doing better than the large-company mutual funds after 3 years, but as I've been reading, that's probably good luck. The only thing you should be comparing yourself against is the s&p500, if you haven't beaten that, then you're down. Also, the markets have been in an unprecedented bull run. Everything y…

>Also, the markets have been in an unprecedented bull run. Everything you've learned will be useless once the tide turns

This is the real problem. Easy to beat the markets in a bull run when you're invested in high beta/high risk stocks.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#264

Post by wc- » Thu, Jan 25, 2018, 10:39 PM UTC

dawhizkid wrote: post #254

smallnamespace wrote: post #246

Earlier quoted context omitted.

> emotional, irrational day trading among people who can least afford it This is completely untrue on the face of it: "Unless you have an equity balance of at least $25,000 in your account, your Robinhood Instant or Robinhood Gold account is limited to no more than three day trades in a sliding five trading day window [emphasis mine]. Exceeding the three day trade limit will restrict your account from placing further…

Did you read the last sentence of that article? "This limit applies to margin accounts (Robinhood Instant and Robinhood Gold), but not to cash accounts." Also day trading is not a limit on total buys/sells - they're specifically saying it's a limit on buying/selling the same security repeatedly when they are lending you money in a margin account.

Per FINRA rules: Cash accounts are effectively limited to a settlement schedule (at least a day) in which the unsettled funds from one trade cannot be used for another trade. If the unsettled funds are used for another trade, it begins to count toward pattern day trading. Attempting to bypass the pattern day trading limitation with a cash account can also be subject to good faith violations.

So to follow FINRA's rules, Robinhood will limit cash accounts from pattern day trading as well as margin accounts. The rules applied to margin accounts are stricter, but truly day trading in a cash account won't work for long.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#265

Post by product50 » Thu, Jan 25, 2018, 10:41 PM UTC

dawhizkid wrote: post #123

Something about Robinhood just makes me uneasy - clearly their main target market is the small retail investor who is sensitive to a $7/trade fee, but the low friction, mobile-first no fee stock trading experience they've created mostly serves to encourage bad investor behavior i.e. emotional, irrational day trading among people who can least afford it. Now they are "democratizing" margin trading (Robinhood Gold), op…

Do you have any data to back your claims that small uneducated retail investors are struggling with Robinhood or are you just making these blue sky claims. Do you really think retail investors will look at Coinbase's 1.5% fee and be like nope, I don't want to invest there.

I for one totally welcome this move. Coinbase is making billions on their product with high fees (because of low competition) and this should even the playing field.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#266

Post by skellera » Thu, Jan 25, 2018, 10:43 PM UTC

52-6F-62 wrote: post #194

nlowell wrote: post #179

Earlier quoted context omitted.

I think Robinhood does a great job of giving young traders the experience and knowledge of what actual trading is like before they're managing really meaningful amounts of money. College kids trading $500 on Robinhood are going to become 30 year olds who have a much better sense of how markets work and how emotion affects their own trading than college kids who are just instructed to give all their savings to mutual…

I agree probably 90%. If this had existed when I was in my first year of university and had a little money in the bank still, I probably would have thrown some at GOOGL when the Gmail beta came out....... On the other hand, it could have got ugly. Hindsight is often 20/20 and young people can get competitive, over-aggressive, and dumb. It took me until far more recently to even start to pay any attention to things li…

We’re going to see a massive loss in money in the next crash. With low interest rates, everyone is in the market in some way. Mostly in index funds, bot traders, or things like RH. The next crash is going to destroy those funds as they try to sell off their massively overvalued stocks.

We’re setting up for a rough time. The baby boomer’s retirements and the millenial’s savings(in the market, not savings accounts) are going to get hit really hard.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#267

Post by parasj » Thu, Jan 25, 2018, 10:46 PM UTC

vasilipupkin wrote: post #238

parasj wrote: post #168

Earlier quoted context omitted.

Robinhood makes money on execution (through exchange maker-taker fees [1] and reselling order flow to hedge funds or market makers). It's in their best interest to promote more volume to increase revenue. They're making money of each and every trade. [1] for example https://www.nasdaqtrader.com/Trader.aspx?id=bx_pricing

that's a bizarre complaint for a brokerage. Every brokerage exists to make money on trades.

Not saying it's bad, I just wanted to note that the VCs don't need to subsidize your trades on Robinhood.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#268

Post by ram_rar » Thu, Jan 25, 2018, 10:47 PM UTC

briatx wrote: post #126

Alex3917 wrote: post #117

Earlier quoted context omitted.

Bitcoin is backed by an asset with a tangible value that may or may not increase over time. What exactly is Blackjack backed by?

Bitcoin isn't backed by an asset. It's not really backed by anything other than people's expectation that it is worth something now (and it will be worth more in the future). This is true even for the miners, since they would not build out infrastructure and burn energy if bitcoin was worth zero.

So is Gold!

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#269

Post by product50 » Thu, Jan 25, 2018, 10:48 PM UTC

fra wrote: post #89

I'm disappointed in Robinhood. They've done great work making equity investment approachable to people who are traditionally alienated by it. Their mission, "[...] to democratize the American financial system." caries fantastic social value and generates a lot of good will for them. Entering cryptocurrencies IMO runs counter to that mission. It's a cash grab which will expose their users to poorly-understood risks an…

Don't use it if you don't want to. But literally millions of American citizens are getting into crypto right now (looking at Coinbase's numbers). And if this is an emerging area, I don't see any problems with them coming in.

I feel most negative comments on this thread are from folks who missed the crypto train last year and are just bitter and trash any new development in this area.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#270

Post by botskonet » Thu, Jan 25, 2018, 10:48 PM UTC

nlowell wrote: post #179

dawhizkid wrote: post #123

Something about Robinhood just makes me uneasy - clearly their main target market is the small retail investor who is sensitive to a $7/trade fee, but the low friction, mobile-first no fee stock trading experience they've created mostly serves to encourage bad investor behavior i.e. emotional, irrational day trading among people who can least afford it. Now they are "democratizing" margin trading (Robinhood Gold), op…

I think Robinhood does a great job of giving young traders the experience and knowledge of what actual trading is like before they're managing really meaningful amounts of money. College kids trading $500 on Robinhood are going to become 30 year olds who have a much better sense of how markets work and how emotion affects their own trading than college kids who are just instructed to give all their savings to mutual…

I've been using Stash to invest in some EFTs. I've only put in $50 to date and will put in more since the market is doing well but I did it more as a learning experience.

What would be the best way to learn, for someone looking to invest $500+, who's never done much investing before?

Outside of ~10 shares of Starbucks stock given to me when I worked there in 2001, this has been my only experience.

P.S. Those Starbucks shared have been long-lost - somehow they moved them from Schwab to another company and no one told me where/how). I forgot about them until today.

EDIT: Looking at my docs, I bought 7 shares at $18.275 in April 2001. The stock price is $60.55 today. I need to figure out who holds these and see what I can do to reclaim them.

EDIT2: I found them. I found where the original account was, called them and got the details. Sadly, the account was marked as dormant and I learned about "Escheatment". The stocks were cashed and the amount is now held by my state and I have go through several hoops to reclaim.