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Jul 1, 2021 · Should You Avoid Robinhood? Robinhood is definitely a great way for new investors to get their feet wet in the stock market. However, it's important to know that Robinhood's free trades come at a price, and in a lot of situations Robinhood is an unsuitable investment broker.
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Robinhood provides free stock, options, ETF and cryptocurrency trades, and its account minimum is $0. Mutual funds and bonds aren't offered, but IRAs with a 1% match are.
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- Robinhood employs a risky business strategy to make money. Options can be difficult for new investors to understand, and in some cases, they present the unlimited risk of financial loss.
- The company hasn't had the best start since its IPO launch. In its first two quarters, Robinhood has posted mixed financial performance. Year to date, the company has reported a net loss of $1.9 billion and holds $17.9 billion in total liabilities.
- It's had significant problems with the SEC. Robinhood offers "zero commission fees" on every transaction, yet it's still making money from each trade using a taboo practice called "payment-for-order flow" (PFOF).
- Robinhood has broken the public's trust. Robinhood has had a rollercoaster of a year, with many news-breaking transgressions. Last January, Robinhood halted trading after retail investors started rapidly buying and selling shares of GameStop.
Robinhood makes investing so easy that some people end up trading beyond their knowledge and financial means. In this post, I’ll explain who should and shouldn’t use Robinhood. I’ll also explain what types of trades and investing work well with Robinhood and what’s better left to other platforms.
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Apr 12, 2024 · Pros. No account minimum, no monthly fee. Very easy to use. Allows cryptocurrency and fractional share trading. Instant access to deposited cash. Cons. App design may encourage active trading,...
Apr 12, 2024 · If you're seeking a full-service investment brokerage platform with access to bonds, mutual funds and futures trading, Robinhood isn't for you.
May 14, 2024 · The short answer is yes, technically Robinhood is free and charges $0 for stock, options, and cryptocurrency trades. However, certain features require a $5/month subscription to Robinhood Gold, and Robinhood does accept payment for order flow, or PFOF.
