Robinhood Review: Can Free Stock Trading Work?

Robinhood Review
  • Customer Service
  • Commission Fees
  • Trading Platforms
  • Research Tools

Robin Hood is famous for the rich and giving to those who are less fortunate. And, the Robinhood service tries to do the same. Ever since 2013, this company has been in the work of offering 0 dollar commission for stock trading for all residents of the United States. So, if you are a small-account trader, head right in and check them out, you might love it. They are also famous for a very simple trading app that you can use on your phone.

But, how can a free trading platform work? Well, for starters, they keep the experience simple for a reason. They only offer the bare bone necessities you want. And you can only trade via the mobile phone app. This is set up in that way simply to reduce the costs and keep the company working. However, how good can the service really be?

What can you trade?

To be clear, the application is not all-encompassing. The app launched in 2015 and you could only trade securities that are publicly listed via market orders. And, while they did expand upon the list since, it is still not that impressive. You can now place stop loss and limit orders. You can also enjoy the benefits of margin and after-hours trading. However, you cannot enjoy shorting or purchasing pink sheets. Futures, options, mutual funds, and forex are all unavailable.

Commissions and Fees

We have to admit, when we saw that the app was free and that they don’t take a commission, we couldn’t figure out how they stay afloat. And, they are true to their word. You can have $0 trades. And there is no minimum amount for a deposit either. However, they did start exploring ways to generate revenue. So, in 2016, they decided to launch Robinhood Gold, a way to get a premium “tier” among their clients. It comes with 2 important benefits. The first one is that you can trade after hours. And the second one is that you can trade with any funds you deposit immediately. However, even the Gold tier is not expensive. In fact, it is adjusted based on your account balance. It can go as low as 6 dollars per month.Robinhood Commissions and Fees

Of course, this type of commission set up is not ideal for everyone. If you expect to place a large number of orders, of course, it seems like a good way to save money.

However, if you plan on placing large orders and you want the capability if investing in different instruments, it is less than ideal. Not to mention that there are other companies that offer services that overshadow the Robinhood Gold. And they charge even less. So, it is definitely less than perfect.

Robinhood Platforms and Tools

All that you have at your disposal is a part of the mobile app. Even placing the trade can only be done via the application. In order to keep up with their own pricing system, the company doesn’t even allow you to manage your account through the website.

Mobile Application

If you go with this app, your mobile phone will be your best friend. Every single function they offer, you can only use the phone. So, you can transfer funds, pull up stock quotes, adjust your settings, follow watch lists, and, of course, place trades, through the app. And, of course, it is available for both Android and Apple phones.Robinhood mobile

And one thing that impresses us is how simple it is to use. In fact, it is great for basic stock traders. The focus was clearly put on simplicity. This has its upsides and its downsides. We love how easy it is to access your watch lists and check your charts etc. On the other hand, the lack of options is a concern.

Namely, the watch lists could include additional columns, charts should be modifiable beyond the default ranges, there is no option for technical analysis and lastly, you can’t use it while holding your phone in a horizontal position.

Our Final Thoughts on Robinhood

While this platform does seem to have a lot of flaws, it is useful in its own ways. The mobile app has flawless functionality and it gives you all the basics you might require for trading. And, of course, the main highlight of this broker is the commission they take for trades. Or, should we say, the commission they do NOT take for trades. So, if you are a new investor who doesn’t want to play with tens of thousands of dollars, and you just want to test your hand in the waters by investing several hundred dollars, this is the perfect place to start. Of course, you will soon notice that there is so much more than just placing trades to trading. And, with that in mind, you will probably want to graduate from this platform and onto a better one. In the end, it is all up to you, but, if you are just looking to try your hand in trading with no additional expenses, then this app might be just what you need.

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