Robinhood stock trading app valued at $1.3B with big raise from DST

Post by matwood » Sat, Apr 01, 2017, 11:08 AM UTC

astrange wrote: post #43

Boxbot wrote: post #14

Earlier quoted context omitted.

I have my doubts that playing with the stock market is in any way conducive to "financial health" for the average consumer.

Traditionally (or when I started looking), a single stock trade was $6 so you'd have to be moving 4 digits at a time to avoid losing everything to fees. But Robinhood's free. You can do $6 of trades in a year, still learn about stocks and not necessarily lose anything. Very hard to complain about that. I think a little literacy is needed, since if you're lucky enough to have savings buying CMF+VXF is a much better de…

Post by jcfrei » Sat, Apr 01, 2017, 11:30 AM UTC

throwayedidqo wrote: post #55

Robinhood's Gold tier, which is a different name for buying on margin, has potentially dire implications for the health of the economy.... The great depression was largely the result of massive numbers of everyman speculators entering the markets with reckless amounts of leverage. Robinhood vastly lowers the barrier for gambling with money you don't own. There's a reason you can't buy lottery tickets with credit card…

Post by arcticfox » Sat, Apr 01, 2017, 11:51 AM UTC

adambratt wrote: post #69

Robinhood is just a marketing play. Anything about them selling flow or using margin offerings to become profitable is not realistic. Traditional brokerages have a customer acquisition cost of around $400 to get someone to deposit at least $100 in an account. They've got a million users and continue to grow quicker and quicker. For a small multiple of traditional CAC they are already close to their >$1B valuation jus…

Post by walshemj » Sat, Apr 01, 2017, 11:57 AM UTC

dharma1 wrote: post #66

astrange wrote: post #43

Earlier quoted context omitted.

Traditionally (or when I started looking), a single stock trade was $6 so you'd have to be moving 4 digits at a time to avoid losing everything to fees. But Robinhood's free. You can do $6 of trades in a year, still learn about stocks and not necessarily lose anything. Very hard to complain about that. I think a little literacy is needed, since if you're lucky enough to have savings buying CMF+VXF is a much better de…

Depends on what stage of the cycle you buy in at and what stage of the cycle you sell. Right now equities are priced very highly

Post by vostok » Sat, Apr 01, 2017, 12:09 PM UTC

rl3 wrote: post #68

altern8tif wrote: post #64

Aren't there opportunities for arbitrage given the zero transactional costs on Robinhood? I haven't thought it through that much, but it feels like a lot of sound trading strategies (which were previously impractical due to high transactional costs) can be made to work on Robinhood. *Maybe arbitrage is the wrong term, but zero cost of trading would mean more efficient trading strategies. No?

That's my line of thinking as well. Not arbitrage, but perhaps trading at a frequency not profitable on other retail platforms (and obviously a couple orders of magnitude slower than HFT). Some things you could perhaps do on Robinhood that aren't feasible with other retail brokers include: a) Tiny, tiny position sizes, even on small accounts. 1% position sizing? What about 0.1%? b) Not incurring a transaction fee if…