Robinhood
Robinhood is a platform for trading corporate bonds, equities, and options at a zero-commision rate. They believe that everyone should have access to the financial markets and are on a mission to inspire a new generation of investors. With advancing technology, many people, especially teenagers, have downloaded this application to their iPhones, which makes trading and investing very affordable and accessible. To apply for a Robinhood account, you must be a legal U.S. resident, have a valid Social Security Number, and be 18 years or older. With only these basic requirements, people are able to make trades instantly at no cost. Along with a zero commission transaction rate, Robinhood doesn't require any minimum deposit into the account. As a result, many younger traders have began day-trading, buying and selling of shares in the short-term. It was reported in May 2014, that there was a waitlist for 340,000 people to get started trading.
As a user of Robinhood, I find this application so useful and efficient. I open the application on my phone, put my fingerprint, and there it is, my portfolio and summary. Like co-founder Bhatt say, "it's useful in 15 to 30 second bursts like when you're standing in line waiting to order coffee." Unlike traditional platforms where you have to pull up you computer, input your social security number, password, and other security information, Robinhood allows you to make trades within second. Consequently, more trades are being made and teenagers are able to access more information about the market. Robinhood cofounders Vladimir Tenev and Baiju Bhatt's goal is to be the "go to" trading platform for young people. They believe that "if we can get people to start [investing] when they're in their late teens or early 20's, that's gonna pay tremendously down the road." What Robinhood has found so far with its beta test is that its users are by and large not experienced investors or traders trying out a new toy, but instead first investors. The average age is 27. Younger investors are also able to participate in margin trading. A margin account allows you to leverage your buying power by borrowing money to purchase securities. To buy on margin, you must pay for at least 50% of the value then borrow the rest. This type of trading has significantly increased participation in young investors.
Although there is a rise in interest for stock trading in teenagers, the problem Robinhood founders are facing is that younger users aren’t wealthy and don't have the funds (cash balances) to invest. While "they're a good feeder source," (Richard Repetto) they don’t have a lot of assets. Subsequently, teenagers are avoiding margin trading, in which they have to pay a high interest rate in order to invest. Statistics show that of the 500,000-plus accounts, 48% are run by 18 to 35-year-olds, and only 1.4% of those trade on margin. This lack of profit for Robinhood might cause them to charge for per trade commission. Nevertheless, everyday Robinhood is attracting more and more users and building a larger database.
If you are interested in investing or have some money to play around with, I recommend using the Robinhood application on your iPhone. Not only is trading free, but the application is very accessible and up to date. Although I began buying and selling stocks through Fidelity Investments, I have switched over to Robinhood and have had a wonderful experience.
As a user of Robinhood, I find this application so useful and efficient. I open the application on my phone, put my fingerprint, and there it is, my portfolio and summary. Like co-founder Bhatt say, "it's useful in 15 to 30 second bursts like when you're standing in line waiting to order coffee." Unlike traditional platforms where you have to pull up you computer, input your social security number, password, and other security information, Robinhood allows you to make trades within second. Consequently, more trades are being made and teenagers are able to access more information about the market. Robinhood cofounders Vladimir Tenev and Baiju Bhatt's goal is to be the "go to" trading platform for young people. They believe that "if we can get people to start [investing] when they're in their late teens or early 20's, that's gonna pay tremendously down the road." What Robinhood has found so far with its beta test is that its users are by and large not experienced investors or traders trying out a new toy, but instead first investors. The average age is 27. Younger investors are also able to participate in margin trading. A margin account allows you to leverage your buying power by borrowing money to purchase securities. To buy on margin, you must pay for at least 50% of the value then borrow the rest. This type of trading has significantly increased participation in young investors.
Although there is a rise in interest for stock trading in teenagers, the problem Robinhood founders are facing is that younger users aren’t wealthy and don't have the funds (cash balances) to invest. While "they're a good feeder source," (Richard Repetto) they don’t have a lot of assets. Subsequently, teenagers are avoiding margin trading, in which they have to pay a high interest rate in order to invest. Statistics show that of the 500,000-plus accounts, 48% are run by 18 to 35-year-olds, and only 1.4% of those trade on margin. This lack of profit for Robinhood might cause them to charge for per trade commission. Nevertheless, everyday Robinhood is attracting more and more users and building a larger database.
If you are interested in investing or have some money to play around with, I recommend using the Robinhood application on your iPhone. Not only is trading free, but the application is very accessible and up to date. Although I began buying and selling stocks through Fidelity Investments, I have switched over to Robinhood and have had a wonderful experience.