Have you heard of Robinhood? Do you pay the standard commission of $10 per trade to your stock broker or brokerage firm?
If you do, then you know how much money you end up paying in commissions over a year and throughout your association with the broker or firm.
Fortunately, there is an option now that doesn’t charge you this commission. Depending on how many trades you indulge in throughout a financial year, you may end up saving a couple hundred to several thousands of dollars, if not more. This entire chunk can be your additional income, your savings or you can consider it a pool for another investment.
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Who Or What Is Robinhood?
The name may be a tad misleading for some. Unlike the legend Robin Hood, Robinhood doesn’t offer any largesse to the un-empowered. It helps the un-empowered to be financially rewarded by doing away with the traditional practice of charging commissions on every trade.
Robinhood is just like any other brokerage firm and it offers almost all types of services that a traditional broker would but the domestic trades are not charged for commission, when the trade is initiated by you, online, without the direct intervention of any broker.
Should You Try Robinhood?
You should if you are tired of paying the commissions. But you cannot invest in international stocks. Your pool will be limited to domestic markets and stocks. This may be unviable for some.
Every other charge that you would have paid, services you would have enjoyed and information or tips that you would have got from mainstream brokerage firms would be made available to you by Robinhood.
Once you start digging further, you would realize that there are some unfavorable charges and clauses in the terms of service. International wiring fees are unreasonably high.
Whenever some broker of Robinhood or some staff gets into the act of trading a stock, either on the phone or does it at the behest of the trader, standard fees apply and there is no $10 per trade waiver.
Having an app makes things simpler but having an invitation only approval system makes it harder for any to sign up for the services. The company is still developing some of its premium services so one doesn’t know exactly how things will shape up in a few months or years down the line.
If you wish to save money on every domestic trade that you indulge in without any help, then Robinhood gives you a viable platform.
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