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Fractional Shares

blog.robinhood.com

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Re: Fractional Shares

#41

Post by toomuchtodo »

mhuston wrote: post #38
frockington1 wrote: post #33

Earlier quoted context omitted.

Considering they have completely annihilated their reputation with anyone remotely paying attention, the only market left for them might be 18 year olds who can only invest $10 at a time

> "Considering they have completely annihilated their reputation with anyone remotely paying attention" Can you elaborate on this a bit and/or share article(s)?

https://www.reddit.com/r/wallstreetbets/comments/aeqcvt/i_do... (Failure of Robinhood's risk management systems)

https://www.reddit.com/r/wallstreetbets/comments/dpnzup/i_re... (Reg T violation)

https://www.theverge.com/2018/12/15/18142319/robinhood-finan... (Lying about their to be released cash management feature being SIPC insured that SIPC forced them to walk back)

Re: Fractional Shares

#42

Post by frockington1 »

everetm wrote: post #36
frockington1 wrote: post #33

Earlier quoted context omitted.

Considering they have completely annihilated their reputation with anyone remotely paying attention, the only market left for them might be 18 year olds who can only invest $10 at a time

That's a pretty toxic comment. Surely multiple banks and other software businesses have made mistakes but that doesn't stop the users from trusting their services. All this will blow over and people will forgive and forget. You don't need to age discriminant just because they make it easier to invest

As a financial institution trust is everything. When they lied about savings accounts being SPIC insured, they lost a lot of credibility that will be near impossible to get back. And nothing against 18 year old, I also used Robinhood starting out. But once you have over a couple thousand invested, you need a bit more confidence in the company.

This is without even going into the stupidity that was infinite leverage and the CEOs response afterwards. That is an entirely different level of incompetence that would need a novel to fully expand upon

Re: Fractional Shares

#44

Post by sdinsn »

skookum wrote: post #21
sdinsn wrote: post #12

Earlier quoted context omitted.

Vanguard has fractional shares because it supports DRIPs. (Robinhood does not support DRIPs.)

Isn't this only for mutual funds? AFAIK, Schwab is the only major old-school brokerage that currently offers fractional shares.

> Isn't this only for mutual funds?

No.

Re: Fractional Shares

#45

Post by frockington1 »

egdod wrote: post #40
AcerbicZero wrote: post #27

Ah, shares of shares. Through Robinhood no less. Sounds like a great plan for the platform which has had how many comically massive mistakes over the past few months? Are they going to let r/wsb leverage these 100x as well? Don't get me wrong, I love some of what they're doing....I just don't trust them with my money.

I need some deep out of the money calls on fractional shares at 1000:1 leverage expiring tomorrow to satisfy my personal risk tolerance.

As long as you put on a wolf mask and live stream market open

Re: Fractional Shares

#46

Post by [deleted] »

everetm wrote: post #36
frockington1 wrote: post #33

Earlier quoted context omitted.

Considering they have completely annihilated their reputation with anyone remotely paying attention, the only market left for them might be 18 year olds who can only invest $10 at a time

That's a pretty toxic comment. Surely multiple banks and other software businesses have made mistakes but that doesn't stop the users from trusting their services. All this will blow over and people will forgive and forget. You don't need to age discriminant just because they make it easier to invest

[deleted]

Re: Fractional Shares

#47

Post by tempsy »

skybrian wrote: post #37
crazygringo wrote: post #34

Earlier quoted context omitted.

Actually I think this is huge, not for existing investors but precisely for people who aren't . For a teenager who wants to invest $100 to "dip their toes in" when a share of Amazon is over $1,700?!?! And Google over $1,300? Back in the days when stock regularly split it wasn't a big issue. But now that a bunch of companies think it's somehow unfashionable to split their stock (e.g. Amazon and Google), all this does…

Do we want to encourage teenagers to buy stock in individual companies? Index funds I could see.

Why not?

Mainstream personal finance advice is pitiful.

There's wide consensus that ETFs are a bubble. On the other hand, the notion that buying an individual stock is equivalent to gambling is nonsense.

Re: Fractional Shares

#48

Post by crazygringo »

skybrian wrote: post #37
crazygringo wrote: post #34

Earlier quoted context omitted.

Actually I think this is huge, not for existing investors but precisely for people who aren't . For a teenager who wants to invest $100 to "dip their toes in" when a share of Amazon is over $1,700?!?! And Google over $1,300? Back in the days when stock regularly split it wasn't a big issue. But now that a bunch of companies think it's somehow unfashionable to split their stock (e.g. Amazon and Google), all this does…

Do we want to encourage teenagers to buy stock in individual companies? Index funds I could see.

Better for them to learn early on that stocks can fall, with small amounts of money.

People need to be allowed to make mistakes with low risk.

Re: Fractional Shares

#50

Post by meritt »

deminature wrote: post #16
meritt wrote: post #11

Earlier quoted context omitted.

> what is the actual "vehicle" with which the shares will be purchased They changed the data type on the shares_owned field from int to floating point. That's about it. You never owned the shares in the first place, and their maximum risk is the unallocated fractional amount of 1 share of each affected stock (I do wonder if BRKA is disqualified). Learn more: https://www.bloomberg.com/opinion/newsletters/2019-10-18/mo…

Yes, I'm sure implementing this feature was as simple as modifying the ownership column in the database. How are dismissive, unthinking comments like this upvoted?

It was a tongue-in-check reference to the article I linked.

> Your share ownership consists of just a number in a database on Schwab’s computers, and if Schwab wants to make that number floating-point that’s Schwab’s business.

But let's not act like Robinhood is doing anything new, innovative or difficult here. Numerous other brokerages have offered fractional shares for the past decade.

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