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Maybe with some of your money, but not to the extent a lot of people are doing.
People want to get rich quick I guess? Even if you do want to do that, why not pick a brokerage which doesn't take as much from you, like IBKR?
It's just a surreal situation to me.
Robinhood was an absolute game changer for me. Outside of my 401k (and a Viacom stock my mom bought me 20+ years ago to teach me about the stock market), my investment portfolio was nil. I now maintain a growing but conservative portfolio of stocks thanks partly to the frictionless UX of Robinhood - but, primarily, to the addition of fractional shares. To pay $1500 for a share of TSLA? When I could put that precious…
I do not get the appeal of largely gambling with your money on RH instead of just passively investing for the long term. Maybe with some of your money, but not to the extent a lot of people are doing. People want to get rich quick I guess? Even if you do want to do that, why not pick a brokerage which doesn't take as much from you, like IBKR? It's just a surreal situation to me.
Earlier quoted context omitted.
Mutual funds and ETFs are basically that but you get a sliver of like several hundred high quality companies instead of just one. I’d argue those products did more for democratization because they allowed investors with small sums of money to achieve diversification.
The only thing to remember is, as a customer, you’d be paying for that service in really bad execution. I still think this is genuinely democratizing but looks like Fidelity has this also (called the absurd “stock by the slice”)
Robinhood was an absolute game changer for me. Outside of my 401k (and a Viacom stock my mom bought me 20+ years ago to teach me about the stock market), my investment portfolio was nil. I now maintain a growing but conservative portfolio of stocks thanks partly to the frictionless UX of Robinhood - but, primarily, to the addition of fractional shares. To pay $1500 for a share of TSLA? When I could put that precious…
Robinhood was an absolute game changer for me. Outside of my 401k (and a Viacom stock my mom bought me 20+ years ago to teach me about the stock market), my investment portfolio was nil. I now maintain a growing but conservative portfolio of stocks thanks partly to the frictionless UX of Robinhood - but, primarily, to the addition of fractional shares. To pay $1500 for a share of TSLA? When I could put that precious…
That's the problem of RH - in your cases stock is managed because of "frictionless UI" whilst it should be managed due to financial considerations but not because they have made it easy as getting a cup of coffee. You need to understand the model how low cost services like RH operate - they sell all your data to big hedge funds. Guess what happen at certain moment when smart money will decide it's time to cut pigs -…
>It has happened before in history
When?
That debate at the end over how the NYT portrayed how much money is made off of the order flows is interesting. Is it reasonable for the NYT journalist to use total payment order flow revenue / average dollar amount per account instead of diving by total number of accounts? The latter seems like it would be a cleaner way to say "this is, on average, how much they're making off of each person" Whatever it is - Robinho…
The "value" of order flow is not "per person". Ordinarily, it should correlate with order volume, but RH is getting far more than expected on (something close, but not exactly) that measure. I wonder if RH customers maybe trade far more than those of other brokerages? Maybe that data isn't publicly available, requiring them to use average account value as a proxy? Anyway, the point here is to stoke anger from RH cust…
I believe this is true. The metric, revenue per mean dollar, is used in the industry as a measure of how productively customers’ assets are being monetised. It lets bank managers compare e.g. trading and wealth management. Given a lot of compliance costs scale with accounts and assets, not volumes, the measure makes sense.
Robinhood was an absolute game changer for me. Outside of my 401k (and a Viacom stock my mom bought me 20+ years ago to teach me about the stock market), my investment portfolio was nil. I now maintain a growing but conservative portfolio of stocks thanks partly to the frictionless UX of Robinhood - but, primarily, to the addition of fractional shares. To pay $1500 for a share of TSLA? When I could put that precious…
You can do those things on any brokerage. You can buy options pretty much anywhere. Not seeing where the democratization is coming from that is different from the status quo
I only want to spend a couple of hundred on long term options ..
I disagree with the premise of the article, since it takes the POV of an experiences trader, but that isn’t necessarily the whole story. The alternative for a lot of Robinhood traders wasn’t / isn’t trading on e trade or another platform, it’s not investing at all. If the market is going to be growing, which is the assumption of any economic theory, it should follow that people want to get money into the market in or…
Agreed. But cash in a day trading account at the hands of an inexperienced trader has a lower expected return than that bank account. Particularly if they’re trading options.
The net effect of Robinhood is we’re training a generation of investors with self-destructive habits. It’s possible to use Robinhood responsively. But its UX is antagonistic to that use pattern.