Robinhood Stock Trading Review
Price: FREE / Tiered GOLD version for margin
Overall Rank: 9.7 out of 10
Robinhood Product Overview
Robinhood has become a disruptive name in the financial market. Having had a handful of discount brokerages through, E-Trade, Scottrade, Capital One, and my bank I wondered “Why do I need so many brokerages?” And for me, it came down to I kept looking for the best value I could get for my style investing. We will see what makes Robinhood different from the rest and if it’s worth it to start over with another brokerage account.
The Good & The Bad
- FREE trades to buy or sell shares
- Market or Limit Orders included
- Options & Crytpo Trading
- Compare stock price paid vs other users
- No DRIP (Dividend ReInvestment Program)
- Limited research tools
- No Mutual Funds
- No IRA accounts
Who is Robinhood For?
If you either want to invest in a few shares or know exactly what stock you are looking for then this may be the best new brokerage available. With all trades being FREE to buy and sell, finally purchasing a single share is more cost-effective from the $5-$10 fee to buy and sell the stock.
However, if you want to build an IRA or invest in mutual funds then Robinhood currently cannot help you attain that goal. There are some limitations to Robinhood that they may work on in the future, but if you want to use Robinhood to it’s fullest we recommend short-term investing with limits and auto-depositing to keep your money working for you.
Robinhood Tools & Support
Sadly the research tools are fairly limited compared to all the other discount brokerages. We believe this can be attributed to the vast number of sites where news and analyst ratings are readily available on any particular stock.
However, we have noticed on the new desktop version that Robinhood now shows how the current stock price compares to other Robinhood users, which can be helpful when evaluating your positions. (See the chart for the stock GE)
They have a knowledge base and support is responsive and able to resolve issues quickly (We had to use them to finalize our free stock offer).
The best part of the primary service of Robinhood is that it is Free. Free to trade, free to buy a single share and free to sell it. This tends to be the best feature and why it’s disrupting the big name brokers.
There is an option for a Robinhood GOLD version which allows you to leverage your money for a small fee and allows you to deposit more money without it being held till it clears. (currently, the limit is $1000) If you are a more active trader, GOLD may be a good option for you but they provide enough benefit for the everyday investor that the main service can satisfy the vast majority of typical investors.
Final Opinion on Robinhood
The brokerage world is changing and it’s services like Robinhood that will start to catch on and spread and disrupt the market we’ve been so used to. However, it will involve a change, and a change of accounts is never easy for those who have longevity with their current financial organizations.
Robinhood has started as an App Only service and recently added Crypto and Desktop support. They briefly mentioned introducing a new high rate checking account but had to recall those plans to finalize how they will be insured. Who knows all that is in store, but it’s only a matter of time before they begin to move on to the next disruptive feature in the financial world.
Sign up and start your own account and they’ll give you a free share of stock to help you get started.
Price: Free / GOLD Upgrade Option
Rating: 9.7 out of 10
Verdicts: Legit and Recommended