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Robinhood’s big gamble

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Re: Robinhood’s big gamble

#51

Post by grey-area »

arcticfox wrote: post #45
joncp wrote: post #36

Definitely. Here's a couple of things that hit me in the face when I use RH: 1) You open the app and the first view is the one-day graph with the bottom lopped off of the y-axis. This encourages day trading and reacting to tiny fluctuations in the market. If they want to encourage investing over gambling, they'd show you the long-term graph of your portfolio. Or maybe skip the graph and take me to the fundamentals. 2…

> Crypto has never and can never be an investment Whether you like or dislike crypto, this seems false according to both the dictionary and common use definition

Speculation, not investment.

The use value of cryptocurrencies is near 0.

Re: Robinhood’s big gamble

#52

Post by dehrmann »

callamdelaney wrote: post #39
Someone1234 wrote: post #21

I have a Schwab brokerage account, until recently I could trade OTCs and can still trade warrants and futures. These are riskier securities than common stock. None of which is possible on RH as far as I know. When I created my Schwab account I received and was offered no specific training, and largely learned how to trade on YT, Investopedia, and articles. My point is this: RH has become the media's favorite whipping…

Yes, but Robinhood have taken actions which purposefully harmed its users in order to benefit their corporate customers(Citadel). https://www.independent.co.uk/news/business/robinhood-gamest...

I think Schwab does this, too, and it supposedly gets traders better prices.

Re: Robinhood’s big gamble

#53

Post by omegaworks »

JumpCrisscross wrote: post #34
dcolkitt wrote: post #24

Earlier quoted context omitted.

The basis of US securities law is that rich people ("accredited investors") know enough to be responsible to take risks. Whereas poor people are too stupid to make risky investments without turning into degenerate gamblers. A lot of debates about financial regulation basically come down to whether this is a good principle or not. Too many times, both sides are arguing at cross purposes, because one implicitly assumes…

> rich people ("accredited investors") know enough to be responsible to take risks This is a straw man. The real argument: someone with more money is less likely to become destitute as a result of a bad investment. Also: someone with more money is less likely to become a political problem that shuts down the market, or a drain on the public purse, when they lose money. When it comes to private investments, someone in…

>someone with more money is less likely to become a political problem that shuts down the market, or a drain on the public purse, when they lose money.

laughs in 2008 securities crisis

Re: Robinhood’s big gamble

#54

Post by thebean11 »

SmellTheGlove wrote: post #41
Someone1234 wrote: post #21

I have a Schwab brokerage account, until recently I could trade OTCs and can still trade warrants and futures. These are riskier securities than common stock. None of which is possible on RH as far as I know. When I created my Schwab account I received and was offered no specific training, and largely learned how to trade on YT, Investopedia, and articles. My point is this: RH has become the media's favorite whipping…

Schwab doesn't have outages during sell-offs of very visible investments, though. Hasn't Robinhood hit the rocks pretty hard during GME and DOGE sell-offs recently? The reason I won't use them is because I don't think I'm their customer - whoever is paying for the order flow is, and I don't trust their platform to be available in the middle of turbulence. EDIT: I get it - Schwab also had visible outages. Sorry for th…

Schwab had multiple outages during height of the GME craze.

Re: Robinhood’s big gamble

#55

Post by Someone1234 »

SmellTheGlove wrote: post #41
Someone1234 wrote: post #21

I have a Schwab brokerage account, until recently I could trade OTCs and can still trade warrants and futures. These are riskier securities than common stock. None of which is possible on RH as far as I know. When I created my Schwab account I received and was offered no specific training, and largely learned how to trade on YT, Investopedia, and articles. My point is this: RH has become the media's favorite whipping…

Schwab doesn't have outages during sell-offs of very visible investments, though. Hasn't Robinhood hit the rocks pretty hard during GME and DOGE sell-offs recently? The reason I won't use them is because I don't think I'm their customer - whoever is paying for the order flow is, and I don't trust their platform to be available in the middle of turbulence. EDIT: I get it - Schwab also had visible outages. Sorry for th…

> Schwab doesn't have outages during sell-offs of very visible investments, though.

Yes they have. During one very red day they were down almost all morning (although StreetSmart Edge worked).

Re: Robinhood’s big gamble

#56

Post by kwertyoowiyop »

grey-area wrote: post #51
arcticfox wrote: post #45

Earlier quoted context omitted.

> Crypto has never and can never be an investment Whether you like or dislike crypto, this seems false according to both the dictionary and common use definition

Speculation, not investment. The use value of cryptocurrencies is near 0.

Tomato, tomahto

Re: Robinhood’s big gamble

#57

Post by lazide »

dcolkitt wrote: post #24
MR4D wrote: post #5

Both. 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).

The basis of US securities law is that rich people ("accredited investors") know enough to be responsible to take risks. Whereas poor people are too stupid to make risky investments without turning into degenerate gamblers. A lot of debates about financial regulation basically come down to whether this is a good principle or not. Too many times, both sides are arguing at cross purposes, because one implicitly assumes…

It isn’t a ‘poor people are too stupid’ argument. It’s a ‘poor people don’t have the resources to do enough due diligence, go after someone who scams them using a legal team, or diversify enough they won’t be eating dog food or homeless if this goes sideways’. Which is true.

Additionally, if someone is rich enough they are a millionaire or billionaire or whatever and DOES somehow get ripped off enough to be homeless or eating dog food out of necessity, the general public is going to be cheering for whoever did the ripping off in the next Hollywood blockbuster, not calling their congresspeople angry about how that poor grandma is now destitute and the government SHOULD DO SOMETHING.

It’s a combination of having enough resources to plausibly be able to defend themselves and not lose everything, and a lack of public empathy if they screw up and get ripped off.

Re: Robinhood’s big gamble

#58

Post by emteycz »

pfisch wrote: post #18
sithlord wrote: post #10

Earlier quoted context omitted.

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.

There have been brokers like that for at least 15 years. Zecco was doing it back in like 2006.

Yeah, it is standard in Europe for at least the whole last decade.

Re: Robinhood’s big gamble

#59

Post by dehrmann »

Someone1234 wrote: post #21

I have a Schwab brokerage account, until recently I could trade OTCs and can still trade warrants and futures. These are riskier securities than common stock. None of which is possible on RH as far as I know. When I created my Schwab account I received and was offered no specific training, and largely learned how to trade on YT, Investopedia, and articles. My point is this: RH has become the media's favorite whipping…

I had to apply to get a margin account and options trading with Schwab. It was a pretty minor barrier, but it's enough to know that you're getting into something risky. The issue with Robinhood is that the slickness of the app encourages risky behavior.

Re: Robinhood’s big gamble

#60

Post by thebean11 »

sniperjzp wrote: post #32
sithlord wrote: post #10

Earlier quoted context omitted.

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.

It’s looks like free but it isn’t, RH makes money by selling trading requests to high frequency trading firms like Citadel, which buy/sell before the actual order in a better position so they can earn a penny from selling to or buying from you. The more transactions, the more they earn. - https://fortune.com/2020/07/08/robinhood-makes-millions-sell...

All brokerages do this. RH started charging $0 + (selling order flow) while everyone was charging $5-10 + (selling order flow).

For smaller trades that's charging 99+% less than their competitors at the time..

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