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Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

crypto.robinhood.com

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Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#291

Post by panarky »

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…

When I was in college I made every dumb trading mistake there is.

I traded on emotion, bought high, sold low, with margin leverage, and with options.

Fortunately I didn't have much money then, so my losses were a large percentage but a relatively small dollar amount.

In hindsight all those losses were inexpensive lessons that have served me very well now that I'm older and have more at stake.

So let the young and inexperienced trade. If you protect them from themselves, you deny them the ability to learn at a relatively low cost, and they'll wind up learning later at a much higher cost.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#292

Post by nopriorarrests »

2trill2spill wrote: post #283
nopriorarrests wrote: post #276

Earlier quoted context omitted.

>should not be able to take the same risks as those of “accredited investors”? I would say yes. Well, he should be able, if he wants, but is it good for him, really? For example, options trading is useful for hedging large positions in stocks, so you can pay small amount to, um, hedge against corrections in a bull market. By hedging correctly, you can make some money in during correction while avoiding fees associate…

> But options trading without having large positions in stocks? It's not trading, it's lottery. 1% chance of making 10x return and 99% chance of losing the whole bet. That's a pretty naive statement. Have you ever traded options before? Because it sounds like you haven't. Options like most other securities allow you to chose your risk, everything from lottery type bets to mostly sure deals.

I did. Doing "buy and hold" or even riding FANG`s on some margin requires mostly discipline, and it's already hard for a lot of people. Consistently profitable options trading while managing risk so it won't blow up one day is a profession.

The amount of knowledge needed is on a whole different level.

You are technically correct, but again, we are talking about retail broker targeted to millenial audience. I would be very surprised if 1% of it's audience knows what straddle or butterfly means.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#294

Post by AznHisoka »

aje403 wrote: post #173
AznHisoka wrote: post #160

Earlier quoted context omitted.

First, let's ignore cryptos because I'm talking about IPO's only (albeit the thread is about cryptos) "Providing capital to someone does not only occur in the IPO stage. I'm not even sure how to go about refuting that statement; that's... not how finance works anywhere on the planet." First, I provided that statement in the context of the parent comment. In the equities market, providing capital occurs only in IPOs,…

...What do IPOs have to do with parent argument? Yes, Apple is not receiving any money if there is a share transaction between two investors (duh?). However, providing capital to public companies or does not only occur in IPOs (edit: even if we restrict that with the clause: in an "equities market"). You're right, I could have provided a counter argument. However, at the same time, you should not make such an absurd,…

anything that a person says that he believes to be right (even if mistaken and honestly ignorant) sounds absurd to the person who knows more.

so why not provide an actual counterexample that actually adds value? You still have a chance.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#295

Post by AznHisoka »

School-Cotton wrote: post #252
tony101 wrote: post #241

Earlier quoted context omitted.

What about Berkshire Hathaway? They said they wouldn't pay dividends.

You don’t know they never will forever. Buffet will die someday and his successor might decide to pay a dividend.

this is turning to a very insane argument.. So if Buffet signs a iron clad legal contract that says no dividends ever for the duration of his company, it means the stock is worth 0?

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#296

Post by AznHisoka »

joshuahedlund wrote: post #231
AznHisoka wrote: post #75

Earlier quoted context omitted.

I also think the stock market is not "investing" but think it's safer to invest. 1. There's more government regulation and less manipulation. 2. New money is constantly flowing in, via 401K's and pensions. Most people aren't even aware they're invested in the stock market. 3. The government cares so much about the stock market doing good. Look at how Trump brags about the booming market. If it goes in a funk, the gov…

> People say "past is not a predictor/indicator of the present", yet they love to say "stocks return 7-8% annually, and you should just invest in an index to enjoy such returns". Why? That's such as a huge assumption that everyone takes for granted. Well, you're leaving out something something about the company putting your money to use to increase efficiency or output something something and something something abou…

Other than the IPO, when you buy stock you aren’t providing capital for companies to use though, right? and most companies do not pay dividends at all.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#297

Post by School-Cotton »

AznHisoka wrote: post #295
School-Cotton wrote: post #252

Earlier quoted context omitted.

You don’t know they never will forever. Buffet will die someday and his successor might decide to pay a dividend.

this is turning to a very insane argument.. So if Buffet signs a iron clad legal contract that says no dividends ever for the duration of his company, it means the stock is worth 0?

If such a thing were possible, then yes, it would.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#298

Post by smallnamespace »

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.

You absolutely need to trade on the same security intraday many times in order to generate a profit as a day trader.

Buying a security, then buying a different security, then selling a third security tomorrow -- that's not day trading, that is just the normal flow of equity investing.

Unless you have a lot of money so you can be invested into many different names, you won't be able to do this very many times before you run into the limit, at which point, the rational person will open an account at a different brokerage instead.

The utility of 'zero commission trades' rapidly declines as you have more capital. If you have >$25k to put into a brokerage, paying $1-2 commission per trade (e.g. Interactive Brokers commissions), or even $5-7 per trade (most other retail brokers) is definitely worth the flexibility of being able to change your mind and reversing that trade without the risk of being locked for 90 days.

As for the addendum, sales in cash accounts are settled over several business days and you can't trade on those funds, so again there is no day trading there unless you're very significantly overcapitalized.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#299

Post by kaycebasques »

pembrook wrote: post #237
kaycebasques wrote: post #71

Earlier quoted context omitted.

The main draw for me is no commission fees on virtually any stock or ETF. Although I did just try to buy SPXH (S&P500 + Volatility Hedge) and for some mysterious reason it was "not available for trading on Robinhood", even though it's an ETF with a not-miniscule AUM ($50M). I pinged their support about this, and it took them over a week to get back to me to ask what type of security SPXH is.

$50M is a minuscule AUM for any ETF, especially one meant for trading (volatility hedged vehicles are not good for buy and hold). Institutional investors, Hedge funds, etc will not touch such an illiquid fund.

I mean, in the big-time institutional scheme, I understand that. But from what I've read, $10M is where a fund gets in danger of being delisted.

Re: Robinhood Crypto – Invest in Bitcoin and other cryptocurrencies

#300

Post by aoeusnth1 »

AznHisoka wrote: post #296
joshuahedlund wrote: post #231

Earlier quoted context omitted.

> People say "past is not a predictor/indicator of the present", yet they love to say "stocks return 7-8% annually, and you should just invest in an index to enjoy such returns". Why? That's such as a huge assumption that everyone takes for granted. Well, you're leaving out something something about the company putting your money to use to increase efficiency or output something something and something something abou…

Other than the IPO, when you buy stock you aren’t providing capital for companies to use though, right? and most companies do not pay dividends at all.

This is a common misconception. Companies often raise capital by selling more stock, and by buying stock you increase the amount they are able to charge.
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