Robinhood at a glance
Top feature you’ll love
Intuitive mobile app
While investors can also use the web-based interface to trade, Robinhood just feels like a mobile-first company, and so its most recognizable trading platform is the mobile app. The app is stripped-down, making it simple to navigate, especially once you understand how the app’s icons function. You can quickly move from screen-to-screen, investigating stocks and placing orders.
From a convenient search bar at the top of the screen you can pull up a stock’s chart over any timeframe. It functions smoothly and without delay, so you’re not hanging around waiting for it to load. You’ll get the stock’s vital statistics – its highs and lows, market cap and dividend yield. It also provides a news feed, a composite of analysts’ rankings, and a brief profile. If you’re ready to buy or sell, a trade button scrolls with you down the page, allowing you to submit an order at any moment.
A simple order entry allows you to type in the number of shares or options contracts you want and shows how much buying power you have. From there, just swipe up to place the trade. You can place market orders, limit orders and stop orders and a couple other types.
Beyond placing trades, you can also quickly maneuver around the app to find your portfolio, account value and access a number of account management options.
Pros: Where Robinhood stands out
Stocks, ETFs, options, and cryptocurrency. Check, check, check, and check! You can trade them all for free on Robinhood, and that’s a huge boon to investors, especially options investors. While investors can find free stock and ETF trades at most brokerages these days, the real differentiator for Robinhood is its free options trading.
As options traders know, it’s easy to rack up a huge bill if you’re trading in and out of the market. That’s because brokers charge a fee for each contract. That structure quickly piles on the costs. But at Robinhood? Zilch. It’s a great choice for options investors looking to get into the market.
Of course, beyond all these freebies, Robinhood allows you to trade some cryptocurrencies commission-free, too. And you’ll be able to do so 24 hours a day, seven days a week. You can buy cryptocurrencies directly and not via futures, which is more typical now.
Account minimum and quick funding
With no account minimum, Robinhood is super-friendly to investors, but it’s funding process is even better. If you’ve ever tried to fund a brokerage account before, you know it can take a while to get the funds into the account, even if you move the cash in right as you’re opening the account. That’s why Robinhood’s funding stands out.
Robinhood gets some money into your account immediately. By using instant verification with major banks, Robinhood allows you to avoid the hassle of traditional verification of reporting tiny deposits into your bank account. This means the app can move up to $1,000 of any deposit into the account immediately, with the rest following a few days later. It gets you in the game faster.
Robinhood Gold is the company’s program to provide research and allow you to buy securities with borrowed money, or margin. Robinhood charges $5 a month for the program, which offers research on 1,700 companies from Morningstar, Nasdaq Level II quotes and access to margin loans.
The subscription price includes the interest on your first $1,000 in borrowing, and subsequent amounts are charged at an annual rate that's been lowered from 5 percent to a modest 2.5 percent. The broker charges loan interest to your account every 30 days. If you don’t have cash in the account to pay the monthly fee, it’s rolled into your margin balance. Potential borrowers should note that any margin account must have at least $2,000 in it, per industry rules.
With Gold, you’ll have access to a higher level of instant transfers, up to the value of your portfolio, starting at $5,000 up to a maximum of $50,000. So you can quickly move funds into your account, beyond even the basic $1,000 available to everyone.
Robinhood is great for fractional shares, whether you want to buy or reinvest your dividends. You’ll be able to place a trade with as little as $1, and you can buy as little as one millionth of a share. Robinhood also extends this program to stocks that may not be featured in partial-share programs at other brokers. Most stocks trading above $1 per share and with a capitalization of $25 million are included in the program. Robinhood’s program helps you get all your money into the market rather than having to save up enough to buy that high-priced tech stock.
Now that the major online brokers are offering no-commission trading (at least on stocks and ETFs), Robinhood looks a lot more like a one-trick pony in a field of thoroughbreds. That said, Robinhood can work well for many investors who don’t need all the extras offered at rivals.
- Besides free stock and ETF trades, Robinhood also offers free options trades, and that still compares very favorably against the major online players. Plus, you can trade cryptocurrency at no cost, when that’s still a pricey undertaking at most places.
- Newer investors may find the lack of guidance at Robinhood challenging, especially with little or no research on tap, though Robinhood Gold helps address this.
- Fractional shares are a nice perk, but Robinhood offers only one account type and limited customer support, so you may feel that you can’t grow with the broker.
Investors who are looking for better research and education components can turn to Fidelity, Schwab, or Merrill Edge. If you need a solid mobile app, check out E-Trade which brings its Power E-Trade platform to smartphones. If you need the full range of services or securities from a broker, check out TD Ameritrade or Schwab.
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