Remember when Game Stop and AMC, along with a few others were pumping like crazy on the stock market. Everyone who invested early into Game Stop or AMC made money. Also, those who followed the Reddit groups suggesting what to buy, knew where to put speculation money. It was like retail investors are finally impacted the markets for the people. Retail investor are regular people investing in IPOs or stocks on NYSE, etc. Then you have hedge fund companies that control millions or billions of dollars and must make sure that the funds they oversee stays in the green or mitigate the risks. Usually it is the big corporations, hedge fund managers, and media that move the markets. Suffice it to say it was an amazing time to be in the markets.
During that time a popular app for stock investing was Robinhood, it stands on allowing retail investors to learn and invest in the stock markets confidently. Robinhood also got a bad rep for essentially blocking people from investing in a “volatile” stock, like GME and AMC during the influx of orders. It did hurt them as being the “people’s choice” for investing in stocks, but I would say there are still some good things about using Robinhood as a brokerage account.
Fees
Robinhood fees are substantially lower than other brokers, in fact, the fees on Robinhood were unheard of, it really started a trend in other brokers. Robinhood offers zero commission fees. Grant it, the brokers like AmeriTrade and Charles Swab can provide extremely great customer service and are proven brokers to invest with.
How Does Robinhood Make Money?
You may be asking how Robinhood makes money if it does not have commission fees? Well as with any app there is a subscription fee for utilizing their gold service. The gold service allows you to get cutting edge information through Morningstar and gives you access to margin (ability to borrow capital). Regulatory trading fees, certain transfer fees and certain services are also how Robinhood makes money. But if you are not using any of those services mentioned then really you are not paying for much other than capital gains for long-term or short-term trading.
Why I like Robinhood
Cryptocurrency Ownership
Even though other companies have been extremely competitive for Robinhood when it comes to investing in stocks, the fact that I can purchase digital assets for no commission fees with Robinhood is a major key. Most other centralize crypto exchanges (CEXs) will charge you a fee for investing, that’s not excluding gas fees. Now Robinhood will still charge you gas fees based on the blockchain you are using to transfer funds to but that’s just how Web3 is. Obviously, there are ways around gas fees, especially if you utilize decentralized exchanges (DEXs), dapps, bridges, wrap tokens or different blockchain that have cheaper gas fees.