This is clearly photo shopped right? I mean going up vs going down? and the high vs medium risk statement is, at best, debatable. If this is real, can anyone shed light on how they ensure a user has the capital required to purchase options? ie if I purchase 1 calls of GOOG and they expire ITM what does Robin Hood do if I dont' have $10,000 in cash for the exercise?
> ie if I purchase 1 calls of GOOG and they expire
There shouldn't be holding requirements for going long on options. At the most you lose your hypothetical gains (tho, wouldn't most brokers be nice enough to automatically exercise-and-sell for you for a small commission?)
Isn't tempting people into making losing trades the point, though? Robin Hood presumably has some way of profiting from trades which does not include directly charging people, such as commissions. So the more confused novices are, the more valuable they are as resources whose money can be systematically extracted by counterparties.
How long do people stay around if they lose every time? In an ideal world, people using Robin Hood would "win" like 49% of the time. Enough to keep them coming back like the casino, but let's not be unrealistic and expect some guys clicking around to out trade wall-street.
People don't get discouraged if they don't connect their failures to those profiting. Compulsive gamblers just need a way to avoid making the connection. There is a stock that I used to follow that kept plummeting indefinitely - it would very frequently issue more stock, so you could (and did) always have the opportunity to lose 90% or more of your investment. But maybe once in several years, there was a spike in the stock price, so apparently people kept putting more money in hoping it would happen again and/or believing in endless rationalizations why the printing of stock was finally over. There are people out there who, even when it's really obvious they are being regularly and systematically fleeced, will continue to bet on the idea that it can't go on forever.
Honestly, this doesn't surprise me at all. The interface in Robinhood makes me think it can only be useful for people that have 0 idea what they are doing. Case in point: their graphs (at least on Android) have no labled Y axis! Seriously, WTF.
Seriously maddening : ( How hard was it to put the ticks on the axis? So that at least I can gauge how big the changes are? Those graphs are comically useless...
Depends on the option. "American options" can be exercised at any time before the expiration, "European options" can only be exercised at the end.
I don't see how that distinction relates to my comment. I wrote "buy or sell", not "exercise". And the parent comment didn't mention exercise either. However, your comment is definitely more evidence that you can't make options self-explanatory by renaming them.
The comment you replied to was clearly referring to exercising options rather than buying or selling them. An American call option would be an option to buy something on or before a certain date. A European put option would be an option to sell something on a certain date.
I don't see how that distinction relates to my comment. I wrote "buy or sell", not "exercise". And the parent comment didn't mention exercise either. However, your comment is definitely more evidence that you can't make options self-explanatory by renaming them.
The comment you replied to was clearly referring to exercising options rather than buying or selling them. An American call option would be an option to buy something on or before a certain date. A European put option would be an option to sell something on a certain date.
Yes, the parent comment was referring to exercising options, but the whole point of my comment was about ambiguity and misunderstanding, so you're missing the point...about missing the point.