Robinhood Markets Robinhood Markets  

Robinhood Markets Inc. is a U.S. based financial services company founded in 2013 and headquartered in Palo Alto, California. The Robinhood smartphone app allows individuals to invest in publicly traded companies and exchange-traded funds listed on U.S. exchanges without paying a commission.

 

History

The firm was founded by Vladimir Tenev and Baiju Bhatt who had previously built high-frequency trading platforms for financial institutions in New York City. Tenev and Bhatt realized that high-frequency traders and electronic trading firms pay effectively nothing to place trades on the market. This inspired Tenev and Bhatt to bring existing technology to the retail brokerage market with Robinhood, a commission free stock brokerage. As of March 2016, it has nearly one million customers.

Products

Robinhood is a mobile-first stock brokerage for iPhone, Apple Watch, and Android, allowing customers to buy and sell stocks on U.S. exchanges with zero commissions.

As of May 2015, the firm is the only major brokerage to offer $0 trading commissions for U.S. listed stocks as well as $0 account minimums.

The firm is a FINRA-approved broker-dealer, registered with the U.S. Securities and Exchange Commission,and is a member of the Securities Investor Protection Corporation (SIPC).

Product launch

Robinhood launched out of stealth on the crowdsourced technology news website Hacker News, leading to articles about the company in TechCrunch, PandoDaily, VentureBeat, TheStreet and others. Initially the firm had a waiting list, and in under 30 days there were 100,000 signups. In mid-to-late February of 2014, co-founders Baiju Bhatt and Vladimir Tenev were on CNBC and Bloomberg TV.

By September 2014, the waiting list had reached 500,000 people. In March 2015, the company announced those still on the waitlist could create accounts and any U.S. residents, 18 and older, could apply for an account.

Eighty percent of the firm's current customers belong to the demographic "millennials" (people between the ages 18 and 29, and the current average customer age is 26). Fifty percent of users who have made a trade use the app daily and 90 percent come back to the app weekly.

Funding

Robinhood has raised a total of $66 million in venture capital funding.

It received $3 million in seed capital from Google Ventures, Andreessen Horowitz, Index Ventures, IT Ventures, Social Leverage, and Elefund with several angels. It announced it had raised an additional $13 million in Series A funding in September 2014. Jan Hammer of Index Ventures led the round and joined the Robinhood board. Also joining the round were Ribbit Capital; Howard Lindzon, co-founder of StockTwits and general partner at Social Leverage; Aaron Levie, founder of Box; Dave Morin, founder of Path; Jared Leto; Snoop Dogg; and Nasir Jones of QueensBridge Venture Partners.

It raised an additional $50 million in Series B funding in May 2015, led by New Enterprise Associates (NEA). Existing investors Index Ventures, Ribbit Capital and Social Leverage joined the round, along with new investor Vaizra Investments. As part of the financing, NEA General Partner Kittu Kolluri joined the Board of Directors.

Start Trading

Details

Status
Foundation Year 2013
License
Trading Platforms Robinhood Mobile Platform, Robinhood Gold Mobile Platform
Reliability Rate B-
Authorised Capital
Brocker Fee 0
Exchange Fee
Withdrawal Fee
Minimum Deposit 0
Mobile Trading
Phone support@robinhood.com
Address Palo Alto, California, USA
Website https://www.robinhood.com

User Reviews

   karen_kloss    2016/9/30 07:58   

Submitted usual info to open a Robinhood account and got an email back REQUIRING I UNFREEZE MY CREDIT. Apparently they ran a credit check without my consent and found they couldn't because I had frozen my credit. They say they could not verify my identity with the social security # provided. Baloney. If you had a problem with a social security number wouldn't you email and say "Perhaps there was an input error, would you provide your ss number again?" Instead, they ran an unauthorized credit check? I'm not asking for credit. What kind of SCAM IS ROBINHOOD PULLING? Getting info to send you an unasked for credit card? Setting you up for margin trades? Would people open accounts on Robinhood if they knew credit checks were being run on them? Obviously you would never know unless you had frozen your credit. This routine SCAM has ramifications that the public has yet to feel. BEWARE.


chcurtis    2016/9/30 07:58
I don't think you understand credit checks. EVERYBODY runs credit checks on you and they never need your permission. Any business can run a credit check on you. You want to rent an apartment, buy a car, or open a bank account? They run a credit check. Most of the time, when you apply for a job, your prospective employer runs a credit check on you. And none of that requires that your account be unfrozen. Nor does anyone have to tell you your credit has been checked. A freeze prevents anyone from opening a new account or doing anything that would affect your credit. Opening a stock account IS something that potentially affects your credit rating, and they need your permission to ADD that information to your credit report. This protects you. If someone were to try to fraudulently open an account in your name, they couldn't, because your credit report is frozen. Asking you to unfreeze it is the same thing as asking for a password. It's basic security and not at all sinister, as you seem to think.

karen_kloss    2016/9/30 08:02
so you're saying opening a Robinhood stock account DOES potentially affect my credit rating. I am assuming you a referring to a Margin Account? I have read differing reports that they offer a cash account and a margin account. Assuming they do offer a cash account, why would they need my permission to ADD ANY information to my credit report?

FRANK_YOUFUSH    2016/9/30 08:02
If the worst thing RobinHood has done to you is run a credit check consider yourself a lucky lottery winner! Get ready to have a lot more damaging blows by Robinhood other than a measly credit check!

   do_not_use_robin_Hood    2016/9/30 08:02   

ROBINHOOD uses trade delay in the market to to capitalize profit. they do not make you aware of any trade delay so you blindly buy stock at a different price that what is shown on their app.

share with all your Friends,Family colleague protect those you love


chcurtis    2016/9/30 08:02
Brokers with "seats" on the stock exchange pay thousands of dollars for real-time quotes. ANY quote/trade you do on the internet will have a time delay.

   DouglasK.Bryn    2016/9/30 08:02   

Can you trade Options on Robbinhood ?


FRANK_YOUFUSH    2016/9/30 08:03
LOL, they can't even figure out how to get stock and ETF trades correct. Or, should I say, their computers cannot compute their trades correctly. That is their excuse, so I should relay it to you.

NerdWallet    2016/9/30 08:03
This app is for stock and ETF investors only; you can’t trade options, mutual funds or bonds.(current as of 8/16/16)

   Lou    2016/9/30 08:03   

looking to establish a "level 2" brokerage account - never traded stocks always commodities etc so I'm plowing new ground & looking for suggestions


   TonyMiller    2016/9/30 08:09   

I've been using Robinhood for over 6 months now with minimal problems besides the waiting 4-5 days to access funds after selling a stock (which you can kind of manage with enough money in your acct where as you sell one stock you have the money from another sale available). But recently, I upgraded to Robinhood instant. Today, I sold one of my more volatile stocks thinking it would go down due to Brexit, but it was basically unaffected. Realizing this, I decided I would just buy back in. Robin hood would not let me because they said that I had already sold a volatile stock that day and would not let me buy another (the same) volatile stock until the next trading day (Monday).... The stock went up about 12% ....


   FRANK_YOUFUSH    2016/9/30 08:09   

When I first installed and started trading on RobinHood I placed some "Market" orders and the order was not purchased. I called RobinHood and complained. They stated that in order to make sure an overnight order is executed, I must place orders as "Limit" orders. I have only placed "Limit" orders since that call and all the orders have executed. BUT, today I looked under my history and I received a REJECTED order. It was a very important trade and I placed the order as a "Limit" order and the order was rejected. This is going a bit too far! This company is complete trash!


scubasteve223    2016/9/30 08:09
You dont have a clue how the stock market works huh? Not every bid will be executed. Learn up

   Peter    2016/9/30 08:09   

I'd like to share my Robinhood experience. I'm in my 50s. I joined the Robinhood bandwagon in September 2015, and was recently upgraded to Robinhood Instant. All it took to get approved for Instant was convincing one friend to sign up with a $100.00 investment. Hint: This is what family members are for : )

Why did I join Robinhood? Because I hate paying commissions. Back in September, I was upset that my personal stock portfolio had lost significant value in 2015. Rather than make the same mistake I made in 2012 and sell too quickly, I held on to my positions, but wanted to stop looking at them every day, "hoping" they would go back up. And then I saw an advertisement for Robinhood. I did some research and convinced myself that it was legit. So I took $25K cash (with $5K profit), generated from a company buyout, out of my Fidelity account and invested a little bit of money in most of my deflated stock positions, plus a couple of new ones. I've been doing okay. My dogs are mostly recovering, and I made some good gains on two new positions. I added stop-loss orders to make sure I keep those profits when they drop again. I'd like to ask if anyone on this blog has had better success with setting trailing stops instead of stop loss orders.

When I started trading with Robinhood, I alleviated my fear that Robinhood might profit in a bad price on a market order -- they claim they don't do that -- by placing limit orders. This is a good practice anyway, and it teaches patience. I was pleasantly surprised to see a couple of my orders filled BELOW my limit price, which shows me that Robinhood is on the up and up.

However, a couple of weeks ago, someone -- either on this blog or somewhere else -- claimed that he could put money in, but couldn't take it out of Robinhood. That scared me a bit, so I gave it a test on June 9. I'm happy to report that my $100.00 cash withdrawal appeared in my checking account on June 10, even though Robinhood still reported it as pending, with estimated availability on June 15 (4 business days). I think this is an artifact of the old system, prior to Instant. The same thing happens when I add money to Robinhood. Even though it shows up on my trading platform as available, the automated message tells me it will take 4 business days to post.

As for how Robinhood makes money with "zero" commissions? Everyone wants to know. Let me add my own speculation. I think they do make some money on the float, like in the movie, "Office Space". I realize it's fiction, but there's some truth embedded in there too. More importantly, Robinhood wants to setup a platform for discount margin trading. That's how they'll remain profitable enough to stay in business, which is what all their venture capitalists are counting on. So, let's go Robinhood! Making your platform available in China may give you bragging rights, but China isn't going to let you get rich off of them. Get that margin trading platform going ASAP!

Cheers!

Peter


   CyrusMagnus    2016/9/30 08:09   

Robinhood does not make sales immediately reusable -yet-. That's called Robinhood Instant, and is currently not available for all users. Seems to be in beta. So unless you get access to Instant, you do still have the 3 day waiting period for your sale funds to become buying power again. The instant buying power of funds transferred from a bank account under $1000 is accurate.

Fantastic app though. The fact that the real time statistics are available for free isn't mentioned as something important by many reviews of it, but having it right there and having such a comprehensive list of stocks you can add to or take from to watch is really quite nice. Makes having a second app for that same purpose irrelevant. Not to mention this isn't some ad ridden crap. It's a beautifully streamlined piece of art, from the app perspective. You just put in your pin and you're in and ready to go, I can tap the app and make a trade in under 30 seconds if I need to.

On the other hand, on my phone, I can't even get Snapchat to be up and functional in that same amount of time. Robinhood is incredibly well coded.


FRANK_YOUFUSH    2016/9/30 08:09
DO NOT downgrade to RobinHood instant! If you read about it on Reddit you will hear the sob stories. What RobinHood doesn't tell you is that when you upgrade to "Instant" you can trade with unsettled funds, BUT you CANNOT day trade!!!! You will be flagged for PDT (pattern day trading.) Robinhood instant changes your account into a margin account. If you get in a bad trade and want to sell in the same day to exit, they may let you sell once, but if you change your mind and rebuy, and then get worried again and want to sell, you will NOT be able to sell for a 4th trade or it will flag your account and it will be suspended for 90 days along with a possible SEC investigation. Stick with cash trading, because you will be able to buy and sell as much as you want. But, then again, my app would not let me buy or sell anything all day today, along with not being able to cancel orders, and when I tried to logout and re login, I wasn't allowed back into my account. I also tried all day today to get somebody on the phone and still nobody has answered. I am worried about my money

neminem    2016/9/30 08:09
I don't think that's quite true. My understanding is that if you're flagged as being a day trader, your account *is* flagged, but not that it's "suspended", it just refuses to let you make any more *day trades*. And you can remove that flag so you can day trade as much as you like, just by having at least 25 grand in your account. Personally, I don't day trade anyway, so this restriction doesn't bother me at all. And If I did, I'd just make sure to have 25 grand in my account. And Instant really is a game-changer for me - previously, I needed to keep money in an investing account, if I wanted to be able to immediately take advantage of breaking market news. Now I don't have to (up to $1000, anyway.)

FRANK_YOUFUSH    2016/9/30 08:09
So is your understanding what the fine print reads? Also, what about not being able to get through to customer service in a pinch.... does that not concern you? What about the app being glitchy with no outlet to trade online or on a different platform? When you are in or out of a position, it is not an option to not have access to your own account! That is a must!

neminem    2016/9/30 08:10
Yes, that is what the fine print reads, that is where I got that information from. Where are you seeing something different? And yes, their customer service is lackluster at best. And yes, they were having outages much of yesterday, and yes, I've seen similar outages previously, and yes, that absolutely does concern me. But that... doesn't have anything to do with what you were complaining about, which was incorrect? Like, if you rent a car, and you complain that they double-charged you and also didn't give you the right car, and they didn't actually double-charge you, would you get mad at someone for pointing out that they didn't double charge you, because you still didn't get the right car?

   Stephen    2016/9/30 08:14   

Once I decide I want transfer some of my funds back into my linked bank account, Is there a fee of $75? Is there also a fee to transfer money to my Robinhood account?


NerdWallet    2016/9/30 08:14
As of today, 5/23/16, Robinhood does not charge fees to open or maintain an account, transfer funds, or buy stock. However, there are fees charged by the US Securities & Exchange Commission and FINRA on all sell orders. For more information, see Robinhood's website https://support.robinhood.com/...

   Helen    2016/12/02 10:24   

A very good idea of free access and no fees! But it rather suspicious. The only free cheese is in the mousetrap.


   BleedingEdge    2016/12/28 10:44   

There is a similar broker - freetrade: https://freetrade.io/?kid=BGA76 It also has zero comissions.


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