Robinhood: Review, Analysis and Complete Guide
In the last decade, new online brokers have emerged, among which Robinhood has stood out notably. Since its inception in 2013, the broker continues to increase its client base day by day (reaching ten million) and gather very good opinions.
Although it is a new broker, Robinhood is leaving other more experienced trading brokers in the way. In its early days, the platform was noted for not charging commissions on ETF, option and stock trades.
However, when new brokers began to imitate this no-commission approach, Robinhood decided to go a step further. Thus, the company decided to stand out from the others by offering trading in bitcoins and other cryptomonies for free.
In the following article you will find everything about this innovative broker. You will find not only the pros and cons, the products it offers, but also how the platform works. It is important to note before you start reading that Robinhood does not allow Forex trading.
Pros and cons of Robinhood
- The broker’s platform is totally transparent and regulated.
- Possibility of trading with cryptomonies (Bitcoins, Ethereum and Dogecoins).
- By inviting a friend to the broker you both win a free share.
- Trading platform specially designed for mobile devices.
- No minimum deposit required to open an account.
- It is not possible to trade bonds, mutual funds or Forex.
- Customer service is exclusively through email.
Robinhood Financial Products
Stocks and financial products
- Deposit receipts: Through Robinhood it is possible to invest in deposit receipts in the US for 250 international companies.
- Options: With Robinhood you can trade options without any commission. You will be able to invest through the platform, choosing the company you consider most suitable. If you are an experienced trader, you can also choose which strategy to use.
- ETFs: The great attraction of investing in Robinhood is that it does not charge any commission for the ETFs available. You will be able to invest in the quoted funds of many US companies.
- Actions: Robinhood allows you to invest in the most important companies worldwide, without charging commissions. Through this broker you can invest in Amazon, Tesla, Apple, Microsoft Corp., Eastman Kodak Co, Pfizer and Moderna, among others.
Robinhood is one of the most recommended brokers by the opinions of the users who trade with cryptomoney. The great advantage that this broker offers over others is that it doesn’t charge any commission for trading Bitcoins and Ethereum, among others.
The other great advantage of Robinhood is that it is possible to operate with very low amounts of Bitcoins or Ethereum. This is a radical difference with other brokers who establish a minimum amount for trading with cryptomoney.
In addition, Robinhood has a special program called “Robinhood Crypto”. Through this program, you can buy and sell Bitcoins, Dogecoins and Ethereum every day of the week, 24 hours a day. Always in a transparent and safe way.
Robinhood offers the public only two accounts. Whether with the standard or the premium account, all transactions remain commission-free. The main difference is that the premium account called “Robinhood Gold” has more tools and benefits.
The “Gold” account costs no more and no less than 5 USD per month. For this modest fee, the user has access to Morningstar, 5% annual interest margin trading, and NASDAQ Level II quotes.
How to Open a Robinhood Account
To start trading at Robinhood you need to open an account in your client’s name. This is a really simple process, where you simply have to provide your personal details and wait for the broker to confirm them.
One of the great advantages offered by Robinhood is that no minimum transfer is required to open the account. However, if you later wish to switch to Robinhood Gold, you will need to place the transfer order and start paying 5 USD per month.
Requirements and Verification
To open an account with Robinhood, the first step is to download the mobile application. It can be found for both iOS and Android operating systems. Once you have downloaded the app, you simply need to submit an application to open an account.
Once the application for the opening of an account has been sent, it is necessary to wait one working day to receive confirmation of the approval of the application. In the absence of certain information in the application, Robinhood may require further information from the user via email.
If the broker needs an identity document, they will send the user instructions to be able to load the documents in a secure way. According to the clients’ opinions, the broker requires approximately five to seven days to complete the identity verification.
On the other hand, Robinhood demands certain requirements to be fulfilled by its future clients. You must be 18 years old and have a valid social security number. You must also be a legal resident of the United States.
Nowadays many brokers offer a demo account so that the user can experience the trading platform. This is not the case with Robinhood, as it allows you to open an account for free and does not charge commissions on transactions, not even bitcoins.
While it is always advisable to start with a demo account, Robinhood offers many advantages. Since there is no minimum initial transfer requirement, or commission, you can start trading with this broker in a safe and simple manner just like a demo account.
In order to invest in bitcoins and trade Robinhood stocks and ETFs, you must be a legal resident of the United States or Puerto Rico. The only way to trade in Robinhood in other countries is by being an active US military resident abroad.
The broker had intended to expand its clientele to the United Kingdom, but unfortunately this purpose could not be realized. Although it is not yet known when this project will be able to continue, the truth is that this is a pending task.
How to Use Robinhood
Robinhood is a broker that is committed to incorporating a young sector of the world’s population into the world of trading. In this sense, it is a very simple and intuitive platform for trading, without the need for great knowledge.
In order to invest through Robinhood, you only need to have access to the Internet. It is possible to operate both from the desktop computer and from smartphones and tablets. However, the mobile application has greater advantages.
For those who wish to trade at Robinhood from a desktop computer, simply access the broker’s website. Unlike other brokers, Robinhood does not use classic trading platforms.
Although Robinhood does not have a special platform for desktop computers, user feedback indicates that it is very well suited to the needs. Easy and efficient when investing, with Robinhood’s web interface you can make all your transactions.
Robinhood is a broker that emphasizes new technologies, as it targets an audience born in the 1990s. For this reason, the broker has a much more sophisticated application for smartphones and tablets than the online platform for computers.
Robinhood’s trading app is available for both the iOS and Android operating systems. It is very easy to use as it is designed to be able to trade from anywhere in the world at any time.
This way, with the Robinhood mobile application it is possible to move from one screen to the other, while placing orders and researching stocks. You can get all the details of the stock without delay and without problems, as well as buy and sell bitcoins.
Research and Display Tools
While Robinhood is a broker for young people with little education, users agree that it should upload more educational content. However, the broker’s website has a lot of written information and useful tutorials.
The platform on which Robinhood operates is really simple to use. According to some opinions, it could have more sophisticated graphics. However, its intuitive and simple design is intended to give the user the ability to execute investments quickly, without wasting time.
It is important to note that Robinhood is a broker created for young people. This means that the platform is oriented to be used from smartphones and tablets. The possibility to create customizable alerts and access live profit calls exists only through the app.
With regard to the research section, Robinhood Snacks is the informative section that is updated every three minutes, so that you are up to date with the latest news. This way, you can buy and sell at the most appropriate time, and thus protect your investments.
On the other hand, Robinhood offers the option of contracting its premium service. By purchasing Robinhood Gold for as little as $5 per month, the client will have access to NASDAQ Level II Market data and Morningstar Research Reports.
Robinhood Deposits, Withdrawals, Fees & Limits
Deposit Methods and Minimum Deposit
The avenues to bring in money to Robinhood are still very limited. Unlike other brokers who offer the client various modes of deposit, Robinhood only accepts bank transfers. While it is possible to trade with bitcoins, digital purses are not yet incorporated by the company.
However, the advantage of this broker for trading is that you do not need to make a minimum deposit to open an account. That’s right, as strange as it may seem, Robinhood does not require its clients to make a minimum transfer in order to start investing.
As for depositing money in the broker, the withdrawal of money can only be made by bank transfer. Unfortunately they have not yet incorporated other methods. However, bank transfer remains a safe and reliable way for any customer.
Rates and Commissions
Robinhood is a broker that stood out in its origins precisely because it does not charge fees or commissions. The only thing you have to pay when using this platform is the “Robinhood Gold” account service, for only 5 USD per month.
While Robinhood does not charge commissions for trading ETFs, options and stocks, it does charge for trading on margin. This is a 5% annual fee on stocks and options.
Robinhood has a limit on both income and withdrawal of funds. In both cases, the limit set by the broker is 50,000 USD per business day.
Is Robinhood Safe?
Before starting to invest in a broker, it is essential to be sure that it is a safe place. No matter how good a site may seem for its trading promotions, it is essential to confirm that it is under the supervision of the competent authorities.
In this case, Robinhood is regulated by the Securities and Exchange Commission (SEC). In turn, the broker is affiliated with the Financial Industry Regulatory Authority (FINRA).
Like all insurance brokers, Robinhood has investment insurance for its clients. In this regard, in the event of any misfortune, the money is protected by the Securities Investor Protection Incorporation (SIPC).
This insurance in case of bankruptcy consists of 500,000 USD in securities, and 250,000 USD in cash. It should be noted that operations in cryptosystems such as bitcoins and ethereum are not protected in one hundred percent of the operations.
Many of Robinhood’s advantages, such as no fees and the ability to trade bitcoins for free, lie in its innovation. In this sense, to offer so many benefits, the company has a somewhat reduced structure.
So much so that customer service can only be provided via email or social networks. There are no phone operators in Robinhood as it is a broker focused on pleasing young millennials.
At this point they confront a little bit the opinions of the users. On the one hand, there are those who consider the possibility of communicating by telephone essential. On the other hand, there are the opinions of those who consider that via email any consultation and/or inconvenience can be solved.
One of the best ways to know if it is convenient to invest our money is to listen to the customers’ opinions. The experience of the users is always a point to take into account before making any investment, since it can give us a complete idea of how the broker works.
Christine O. has described her experience as follows: “From the first second I have been captivated by Robinhood. It is a very friendly platform for young people without much knowledge of finance. I am fascinated by trading bitcoins without being charged a commission.”
Mike A. told us about his time at Robinhood: “If you are young and want to start trading, you have found the right broker. Robinhood presents very interesting products in terms of ETFs and options. I hope that one day you will be able to trade Forex.
Alexander M. has also left his opinion: “For such a new broker, he offers certain unbeatable services. My weakness is crypto-currency, and I feel very comfortable being able to trade bitcoins and dogecoins in a secure and commission-free manner.”
Robinhood Alternatives and Competitors:
While Robinhood is a broker with very interesting features, there are also other brokers to consider when trading. Just as Robinhood specializes in trading with cryptosystems such as bitcoins, there are brokers who specialize in Forex.
The best thing to do before you start trading safely is to take a look at all the options available. In the following list you will find the best alternatives for trading stocks, bitcoins, Forex, bonds and CFDs:
Finally, it is noteworthy that Robinhood is an innovative broker that has established a new paradigm in the world of finance. The commitment of its creators to expand trading to the youth sector is reflected in the absence of commissions and the platform’s ease of use.
As a broker that does not require minimum accounts or charge commissions, access to trading investments expands to new audiences. In this way, it is possible to start taking the first steps in trading and crypto-currencies without making minimum deposits or paying for transactions.
While the mobile app has customizable alerts, a news feed and other advantages, the study tools could be made even more sophisticated. It is true that the simplicity of the app allows for fast performance and still meets all requirements.
On the other hand, customer service is only by e-mail. In turn, deposit methods are only through bank transfer and trading in Forex is not allowed. However, it is still an excellent broker for young people interested in learning about trading.
Robinhood's technical data and characteristics
|Countries where it is regulated||15|
|Time to open account||1 day|
|Bank card deposit|
|Deposit with electronic wallet|
|Demo account available?|
|Easy to use platform?|
Frequently Asked Questions about Robinhood
Robinhood is a relatively new broker that emerged with the objective of inserting young people into the financial market. Robinhood’s goal is to ensure that everyone has access to trading activities, and that is why it does not charge commissions on transactions.
Robinhood is a broker for trading that works through a web platform. Its design is very simple in order to guarantee access to all those people who wish to get acquainted with the world of financial transactions.
To invest through Robinhood’s platform, you only need Internet access. This is because the broker has an application for mobile phones and tablets. It is also possible to trade from an ordinary computer.
By using the Robinhood platform, it is possible to safely invest in cryptosystems such as bitcoin. In fact, it is one of the best brokers for trading bitcoins as it does not charge commissions of any kind and allows trading in very small amounts.
However, Robinhood does not yet allow currency trading on Forex. If your goal is to trade on Forex, you will unfortunately have to find another broker who does.
According to users’ opinions, when you operate in Robinhood in a certain way you are already making money, since there are no fees. The broker allows trading with ETFs, stocks, options and crypto currencies such as bitcoin.
Thus, to make money with Robinhood you have to select which product to invest in. The opinions of the broker’s clients assure that it is very convenient to invest in bitcoins since the broker does not charge fees for them.
When investing our money, it is essential to do so in a safe manner. In this sense, Robinhood is a broker insured by the Securities Investor Protection Incorporation (SIPC).
In an anomalous case where Robinhood was forced to return money to its investors, customers have the support of SIPC. Thus, in the event of bankruptcy, the customer is insured for $500,000 in securities and $250,000 in cash.
Robinhood is a broker that is duly regulated by the Securities and Exchange Commission (SEC). It is also supervised by the Financial Industry Regulatory Authority (FINRA), and therefore its activity is subject to its rules.