Robinhood has never posted its AUM. Are they going to try to count checking balances as brokerage balances?
Robinhood launches 3% checking account
601–610 of 684 posts
Re: Robinhood launches 3% checking account
#602Earlier quoted context omitted.
> Metacomment: geeks who believe they have outmathed a financial firm should ask themselves "Are financial firms likely to be bad at math?" and "Are financial firms incapable of hiring their own geeks?" reminds me of the first time i interviewed at google, and one of the interviewers asked "if you could set up your own project and get a team to work on it, what would you do?". i answered that i would get a bunch of m…
Geeks can and do outmath financial firms and even bookmakers and casinos. The financial firm, bookmaker and casino just needs to outmath the 99.9% of customers who are not trying to beat them to win, and evict the 0.01% of customers whose outmathing is so good it is causing them problems.
Sure, but not with a 4-second calculation based on a news headline. That's the larger point here.
Re: Robinhood launches 3% checking account
#603Earlier quoted context omitted.
Apparently, SIPC doesn't provide blanket coverage[1]. So no coverage against, i.e. fire, flood, robbery or embezzlement [2]. The first 3 may not be relevant with digital bank that doesn't handle cash, but the last one might be. EDIT: I misread the second reference. apparently FDIC does not insure against theft or embezzlement, but according to the first link FDIC does provide blanket coverage unlike SPIC. it's still…
Where did you get the "So no coverage against, i.e. fire, flood, robbery or embezzlement" claim from? It isn't in [1] or [2] and contradicts this: https://www.fool.com/investing/brokerage/2014/05/11/what-sip...
From your link:
>SIPC does not protect customer funds placed with a broker-dealer just to earn interest.
In this case, doesn't that mean the people who just use Robinhood has a checking / savings account aren't covered?
Re: Robinhood launches 3% checking account
#604Earlier quoted context omitted.
> Metacomment: geeks who believe they have outmathed a financial firm should ask themselves "Are financial firms likely to be bad at math?" and "Are financial firms incapable of hiring their own geeks?" reminds me of the first time i interviewed at google, and one of the interviewers asked "if you could set up your own project and get a team to work on it, what would you do?". i answered that i would get a bunch of m…
Geeks can and do outmath financial firms and even bookmakers and casinos. The financial firm, bookmaker and casino just needs to outmath the 99.9% of customers who are not trying to beat them to win, and evict the 0.01% of customers whose outmathing is so good it is causing them problems.
With all due respect, I’m going to go out on a limb and assume you aren’t that geek since 99.9 + 0.01 != 100.
Re: Robinhood launches 3% checking account
#605Earlier quoted context omitted.
I’m sure a lot of people might start out that way. But if you get free money for parking your cash there, why not use that money to dabble in some trading? Seems like there is little downside for the company, and potential for upside for the consumer. Pretty good acquisition strategy, in my opinion.
Alternatively: If you get free money for parking your cash there, why risk that money by trading? 3% guaranteed earnings is a very good deal without any downside, while the risks involved with trading that money are substantial.
Greed.
Re: Robinhood launches 3% checking account
#606Earlier quoted context omitted.
Geeks can and do outmath financial firms and even bookmakers and casinos. The financial firm, bookmaker and casino just needs to outmath the 99.9% of customers who are not trying to beat them to win, and evict the 0.01% of customers whose outmathing is so good it is causing them problems.
With all due respect, I’m going to go out on a limb and assume you aren’t that geek since 99.9 + 0.01 != 100.
With all due respect, those numbers are on purpose, i.e.:
99.9% of customers who are not trying to beat them to win
0.01% of customers whose outmathing is so good it is causing them problems.
The rest are customers who are outmathing them, but not enough to cause them problems. And by problems I mean problems worth spending their time on.
Re: Robinhood launches 3% checking account
#607This whole checking account / savings account, credit card/ debit card system that Americans have to deal with is so cumbersome and backwards. For Europeans that don't know: Most Americans have (at least) those two accounts, and those two cards. They usually spend from their checking account with their credit card, and save on the savings account. When they spend on their credit card, they sometimes "earn" points, de…
This comment is hilarious. Its so obvious that you haven't been to America in a looooong time.
What is your experience like? I live in NYC and I find that comment to match my experience today. The only thing missing is that some (perhaps many, but certainly not all) people use one or more of Venmo, Square Cash, Zelle, or Apple Pay to send money from person to person, but default to cash or checks if they don't have a service in common.
Re: Robinhood launches 3% checking account
#608I think folks are overthinking this. The math itself doesn't matter. Have you seen recent Robinhood commercials popping up on TV? Their whole business is to encourage folks that should not be day trading to day trade. Having your money parked there just facilitates knee-jerk-reaction and follow-the-crowd trading.
That is because they sell their order flow to the market makers. They get a rebate on every trade. I bet that is how they make a majority of their revenue.
Re: Robinhood launches 3% checking account
#609Earlier quoted context omitted.
" Their whole business is to encourage folks that should not be day trading to day trade" Also using the ridiculously upside down moral convention that they are somehow 'the good guys defeating the system' i.e. 'Robin Hood'. "We wanted to do something after occupy Wall Street, you know. Something real. So, how about, get all the young people to, you know, put their money into Wall Street" is basically their 'storyboa…
I’m still up 12% (although down from 30%) in this bull market. The trick to buy an array of better companies and to not sell/trade them. Every trade you make gives the HFT MIT quants an opportunity to take money out of your pocket! Hold at least 1 year for the substantial tax advantage, 2 years for gains to materialize (Peter Lynch’s Advice), or indefinitely as Warren Buffet has advised. Also don’t touch or put more…
HFTs don't make money off of retail investors. Can't front run your trade if it can be filled with 1 order. HFTs pray on institutional investors who need to buy or sell large amounts of stock.
Re: Robinhood launches 3% checking account
#610They are offering this as a brokerage and not a bank so the accounts are not FDIC insured but SIPC insured instead https://support.robinhood.com/hc/en-us/articles/360001469903
Why does this distinction matter if that coverage amount for cash is the same for both FDIC and SIPC?
Because the coverage is not the same.