Robinhood’s big gamble
newyorker.com
Robinhood’s big gamble
1–10 of 156 posts
Re: Robinhood’s big gamble
#2I think in principle reducing the barriers to trading on stock markets is a good thing, but gamifying it is not. How much Robinhood are guilty of the latter, I don't know.
Re: Robinhood’s big gamble
#3The internet makes risky behavior more accessible by very nature of connectivity. You can talk to someone on the other side of the world with much less friction. Similarly, a fintech company like Robinhood decided to make stock trading more modern and reduce the barrier to entry.
Granted, this wasn't really a big change in accessibility if you wanted to trade stocks. One could simply goto Fidelity ore other brokers and do the same thing. However, Robinhood's app is much more approachable for someone new to finance.
Reducing the barrier to entry isn't a bad thing and will always lead to some percentage of new comers doing dumb things. That doesn't mean Robinhood is encouraging it intentionally. I think its merely a side effect of their apps approachability for someone less familiar with financial instruments.
Re: Robinhood’s big gamble
#4Why not both? Why are these things supposed to be mutually exclusive?
Re: Robinhood’s big gamble
#5Both.
But then again, Hedge funds for rich people also encourage risky behavior (leveraging up their models, as imperfect as they are from time to time is definitely risky).
Re: Robinhood’s big gamble
#6Robinhood seems to being doing both, but it feels like small retail investors are getting the blame for a speculative bubble that they have little fault for.
Re: Robinhood’s big gamble
#7what's really dumb is the fact it takes 3 days for a trade to settle. why can't I buy $SPY and get my money immediately? it's 2021, jeez.
Re: Robinhood’s big gamble
#8Articles like this strike me as FUD no matter how hard i try and read them another way. "Risk" is such a wide spectrum when it comes to financial investments. Just look at the crypto crash today, and there are hundreds of billions invested there still. Robinhood giving younger people access to options is hardly a doomsday risk scenario in my mind.
Robinhood may well be responsible for a generation gaining investment literacy decade(s) before adults have in the past. Some of these young investors might be burned early, but i'd take the long view and wager that those who start learning now come out ahead in 10-20 years.
Re: Robinhood’s big gamble
#9Only in the same way that all credit card companies encourage risky behavior.
Re: Robinhood’s big gamble
#10The internet makes risky behavior more accessible by very nature of connectivity. You can talk to someone on the other side of the world with much less friction. Similarly, a fintech company like Robinhood decided to make stock trading more modern and reduce the barrier to entry. Granted, this wasn't really a big change in accessibility if you wanted to trade stocks. One could simply goto Fidelity ore other brokers a…
Although robinhood's app was pretty revolutionary, I think their real "innovation" was removing the cost of trades, basically forced the entire market to remove that. Before, it would cost 4.99+ to execute a trade, so if you were not buying significant amounts that could EASILY eat up a lot of profits.