Robinhood - Free Stock Trading

[street]

Anyone familiar with Robinhood Trading? I haven't had time to look in to it yet to see what it is about. I have just heard about it and some people seem to have fun if nothing else with small amounts of money.

Just curious if anyone had any thoughts about it.

 

[LOL!]

What kind of 1099's does it provide? Does it track cost basis well and provide easy ways of doing specific identification? Does it provide ACAT transfer in-kind out to another brokerage?

It appears to be a toy brokerage to me. Since other brokers give plenty of free trades, I don't see the point.

When robinhood inevitably goes out of business, how will clients deal with that?

 

[street]

Great questions. I haven't researched it yet and I wouldn't personally wouldn't be trading in that way any way.

Just posted it hear to see if good bad or if anyone has had any experience with it.

Thanks

 

[jim584672]

How do they make money on you? Robinhood sounds like they take your money and give it to themselves.

 

[foxcreek9]

Use Robinhood as my sandbox. Place small amounts on hunches, etc. phone app only, not available on computers but that is coming. They make their money on idle money and the stock spread. I would not use them as my exclusive broker but for playing around they are great.

They issue a electronic 1099 and yes they track your cost basis.

Highly recommend.

 

[FIRE'd@51]

Are the free trades just for market orders? Do they charge an additional fee for a limit order? If the answer to these questions is "yes" it's fairly obvious how they make their money.

 

[MRG]

Are the free trades just for market orders? Do they charge an additional fee for a limit order? If the answer to these questions is "yes" it's fairly obvious how they make their money.

I think the free trades are limited to some securities. According to the fees and schedule document available to download from here:
https://www.robinhood.com/

I'd not call these free. Perhaps I'm not reading correctly.

 

[street]

Thanks for answering some of the questions and I will up on it sometime to learn more.

 

[chrisaukcam]

Re: Robinhood

They make money on the float. Unless you have a premium account, they hold onto your funds for several days before transferring.

Like a previous responder, I have a small amount with them. A little bit of play money. I got my 1099's at the end of the year. I do not think they are set up for retirement accounts. And I have heard that their customer service is slow. But then you get what you pay for (free).