Robinhood - zero commission stock trading

I stumbled across this tonight. It was posted on facebook by a friend of mine who’s a buried-under-student-loans liberal arts student, but it seems interesting. Backed by Google Ventures and other tech heavyweights like Andreessen Horowitz.

essentially it’s a brokerage app with zero commissions and as far as I can tell zero trading fees (though it has the standard wire fees and all that). Will it last? Is it the app brokerage version of bitcoin? Discuss.

Here’s the link: https://www.robinhood.com/

I signed up for the beta, I’m somewhere around 180,000th in line. My referral link, not that any of you BSDs or I would likely use it. https://www.robinhood.com/?ref=a9F3mf

Others have done this to build a client base and then start charging once a critical mass is reached. They mention charging for ‘active’ customers down the line.

They’re hoping to make it up using payment for order flow - execution reports will tell the real story as to whether customers are getting better pricing here or with transparent up front fees.

Their idea isn’t revolutionary, these are the tenents on which Interactive Brokers was built. It takes a long time to get right and that infrastructure isn’t easy or cheap to build. It’s kind of funny they don’t even list IB as their competitor, instead sticking to the higher cost brokers like Schwab and Scottrade. I’m sure they’ll do ok, just not sure this is much of a game changer. m2c.

All good observations here. Pretty sure they only comped themselves to Schwab and Scottrade as a market positioning issue. Including IB as a competitor in the mix would muddle their goals to stand out as a low-cost provider.

I used Zecco (now merged with Tradeking) and they used to give 10 free trades a month if your balance was over a certain amount… and they offered free trades for the entire month during one of the worst months of 2008… they did away with this deal some time in 2009 or 2010 so no more free trades.

anyone sign up today?

Seems startup-y, not where I want to put my money. And, like zecco, might start charging in future.

I’d rather keep $25K cash / $50K securities in BofA/ML brokerage to get free trades. Crappy crap bank but probably TBTF. Hard to see that depositors (FDIC) or security holders (SIPC) will lose money if it goes under.

I have an account that I funded with like $750. Got my invitation right before Christmas, but I haven’t used it yet though.

I’ve got an account as well and put like $500 in but I haven’t started yet. It will be interesting to see what the execution looks like. FYI You can easily game the system by getting temporary emails and sending the referrals there, which will move you up in line. Every person you send an email to moves you forward in the beta.

Yup, I have IB up right now, just calculated an example trade; BUY $50K AAPL, $2.

I call that free.