6 ms·

Robinhood Gold

91 points by sam9 10y ago

Splendor 10y ago
I love Robinhood. The idea of trading on credit gives me the heebie jeebies though.
- nsrivast 10y ago
  Think of it as acquiring technical debt. Can help you grow faster, but need to monitor it carefully to prevent eventual trouble.
  - cbhl 10y ago
    It's not technical debt, it's just debt debt. Can help you grow twice as fast, but you can lose twice as fast, too.
  - sgndnsg 10y ago
    For the love of Turing, please stop trying to apply this buzzword to everything.
  - matthewowen 10y ago
    Using technical debt as a metaphor for debt is... I wish I could use the "100" emoji here.
    - bobbyi_settv 10y ago
      http://www.theonion.com/blogpost/im-like-a-chocoholic-but-for-booze-10739 http://www.theonion.com/blogpost/im-like-a-chocoholic-but-fo...
- zeusk 10y ago
  You're worried about 20k credit line for trading? Look into margin trading and leveraged ETNs or ETFs, or naked options trading if you're feeling adventurous.
  - soVeryTired 10y ago
    Yes, the financial world offers an interesting variety of ways to blow yourself up if you don't know what you're doing.
pierotofy 10y ago
Robinhood is great. I'm hoping they will go forward with a public API, and perhaps allow options trading soon.
- nerdwaller 10y ago
  I think the margin accounts (gold) is the first step toward allowing Options trading. Excited for this to happen as well. Glad to see a company finally doing a more subscription based model for stock trading instead of the pay per trade rubbish to date.
  - 15155 10y ago
    I would not want to trade options on a platform that: 1) Doesn't allow limit orders 2) Goes down with even modest spikes in intraday volatility 3) Markets and caters to "uninformed" flow I imagine they'll only allow long options or impossible-to-break spreads to limit their risks, if they actually go this route (as evidenced by the severely limited margin given with RH Gold).
    - vinay427 10y ago
      > 1) Doesn't allow limit orders They certainly allow basic limit orders for buying and selling in my experience, though not the fancier types (conditionals, etc.).
blacktulip 10y ago
So when exactly can we UK people use Robinhood?
- riffraff 10y ago
  I wonder if the whole Brexit thingy had any effect in delaying the operation. But the expansion to Australia was more than a year ago, so probably there is something else going on.
  - jazoom 10y ago
    I signed up when they announced but I never heard back from them. I just assumed they gave up on Australia.
- repsilat 10y ago
  I live in the US and I wasn't able to sign up... Good luck.
deleted 10y ago
[deleted]
koolba 10y ago
> Pre & After Trading Hours: Once reserved for institutional investors, extended trading hours let you trade before the opening bell and well after the closing bell — an extra two and a half hours of access, every day. Pre/post market trading is different than normal hours. The liquidity is totally different and generally done with only limit orders. If you don't understand what those are, you shouldn't be doing it. > Additional Buying Power: Gold Buying Power is money that we lend to you to buy stocks, giving you the equivalent of a line of credit for the stock market. You get up to 2x your buying power so you can invest more, and keep any profits. More information on our Help Center. This is called a margin account. It's interesting that they don't call it that. > Bigger Instant Deposits: Take advantage of Instant Reinvesting, which lets you access proceeds from a stock sale immediately, and Instant Deposits, which eliminates the three day wait period for funds to transfer from your bank into Robinhood. Again, this is called a margin account. The way it works is rather than waiting for the prior trade to settle (i.e. the counter party to the trade provides the cash and you deliver the stock), your broker spots you the expected proceeds so that you can trade as if you already have the cash. Scrolling down is the details, terms, etc. I can't tell if making it a different color so you don't notice it's there is intentional or just stylistic choices by their designers. Going to their help pages[1] I found this: > Do I get charged interest on top of the monthly charge for using Gold buying power? > No! You will not get charged interest or fees in addition to the fixed monthly charge of the tier you selected. I'm genuinely curious how they have the capital to do this. Can I open an account and use double buying power to purchase a money market ETF? [1]: https://support.robinhood.com/hc/en-us/articles/213262686-Robinhood-Gold-Buying-Power https://support.robinhood.com/hc/en-us/articles/213262686-Ro...
- pooper 10y ago
  >> Additional Buying Power: Gold Buying Power is money that we lend to you to buy stocks, giving you the equivalent of a line of credit for the stock market. You get up to 2x your buying power so you can invest more, and keep any profits. More information on our Help Center. > This is called a margin account. It's interesting that they don't call it that. This is just my guess but the phrase "buying on margin" probably doesn't test well among barely financially literate people like me. Without a formal education in economics, one of the things I've read is that buying on margin during the roaring twenties magnified the effect of the great depression (if it wasn't one of the causes outright). I am not affiliated with Robinhood. This is just a guess.
sargun 10y ago
Does anyone know of any brokerage that allows me to buy shares from an individual (after exercising them from $STARTUP)?
- mikkom 10y ago
  Why would you need brokerage for that?
  - therein 10y ago
    Perhaps an exchange.
  - sargun 10y ago
    Let's say if I wanted to buy shares from a competing company to hedge my bets. I imagine they wouldn't want to sell to me directly.
83457 10y ago
I know that robinhood is trying to improve things (I guess) but just remember folks that somewhere around 80-90% of retail traders lose money. https://news.ycombinator.com/item?id=12339076 https://news.ycombinator.com/item?id=12339076
- platz 10y ago
  What is improvement exactly, better ux?
  - solaarphunk 10y ago
    At the most basic level, retail traders are paying 8 bucks every time they enter or exit a position, which leads to reasonably significant underperformance versus not having to pay trade commissions on Robinhood.
    - platz 10y ago
      Is that an $8 commission fee per stock trade or an $8 loss on the bid/ask spread? If the former that is definitely the high bar. there are many places (discount brokers) that offer low comissions on stock ttandes more in the 1 dollar range.. or even pennies, that arent 'disruptors'. I think if you are trading often enough thay $1 commission is a problem you'e doing it wrong. Presumably we are talking about folks that are not pattern-day-traders.
      - yummyfajitas 10y ago
        That's an $8 commission. I know Interactive Brokers offers less, but they also charge $30/month prorated against your commissions. What other discount brokers charge pennies or $1?
        platz 10y ago
        Ok, Looking around now the fees are higher for stock than i remembered.. so excluding IB yeah the cheapest I know of is optionshouse/tradeking at $5 for stocks.
mikkom 10y ago
Interestingly they promised shorting when margin accounts are available. I don't see shorting on that list. https://twitter.com/robinhoodapp/status/581924425244655616 https://twitter.com/robinhoodapp/status/581924425244655616
hartator 10y ago
Subscribed to Gold yesterday, I don't like trading on margin but after hours is nice.
- 15155 10y ago
  How and why do you trade after hours without limit orders? Execution on RH is already pretty poor, this seems like a recipe for disaster.
  - jwcooper 10y ago
    > Execution on RH is already pretty poor, this seems like a recipe for disaster. Can you explain this? I like Robinhood for the free ETF and index trades. Haven't really noticed any issues in the year I've been using it.
  - fma 10y ago
    RH needs to make money somehow.
  - cheriot 10y ago
    The article recommends only trading after hours with a limit. Edit: Sorry, I saw that in the help center, https://support.robinhood.com/hc/en-us/articles/214681903-Extended-Trading-Hours https://support.robinhood.com/hc/en-us/articles/214681903-Ex..., "That means your execution price can vary more than during core market hours, so we suggest using limit prices".
  - hartator 10y ago
    From my underatanding, they are using the same exchanges than other low cost brokers. It has been confirmed with my experience using TradeKing in parallel of RobinHood (same spreads and same speed of execution.) I haven't tried trading after hours yet, but it had happenned to me that I wish I had the option in the past.
    - hendzen 10y ago
      The actual orders are handled by Apex Clearing. Apex sells this client flow to a mix of Citadel, KCG, and a few others [0]. [0] - https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal/RHF%20PFO%20Disclosure.pdf https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal...
HoyaSaxa 10y ago
When Robinhood was first announced a few years ago, I was excited that the retail brokerage industry was becoming more accessible for a number of reasons. Most obviously, we live in a capitalistic society, and inherently those who are able to make an equity investment (whether it be in a home, a small business, a startup, or a publicly listed company) are giving themselves a better chance at long-term financial freedom if they are also able to properly diversify their investments. Robinhood still provides a great service to those who have a relatively small amount of money to create a diversified custom portfolio, but I would highly recommend against Robinhood Gold in today's interest rate environment. If you are 25 or younger, which is a core demographic of Robinhood, you are much better of with Interactive Brokers for any type of margin account. The UI/UX leaves a lot to be desired, but you will likely save a lot of money. Let's say that you have $2000 to invest and want to borrow another $1000 for a total investment of $3000. Since you understand the importance of long term investing as well as diversification, let's assume you are going only going to make 10 trades per year (if you are making more than 10 trades per year with a $3000 account you should seriously reconsider your investment strategy). For simplicity, let's also assume your portfolio balance maintains a $3k balance. Each year you will pay: Interactive Brokers: (max($1 x trades per month, $3) * 12) + 1.9% * $1000 = $55 per year Robinhood: $6 * 12 = $72 Of course, this is a very specific comparison, but I encourage you to look at the total cost of a margin account for your specific situation: https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal/RHF%20Retail%20Commisions%20and%20Fees%20Schedule.pdf https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal... https://www.interactivebrokers.com/en/index.php?f=1595 https://www.interactivebrokers.com/en/index.php?f=1595 I would also highly discourage anyone from trading outside of 9:30 AM to 4PM ET unless there was major news on a specific company (up to 4:15PM for the most actively traded etfs given the futures market keeps the bid/ask spreads tight). Finally, I would encourage you to read more about the systemic risks ETFs pose to the market before deciding to use them as an investment vehicle. They provide great utility to small investors, but also contribute to liquidity risks that are still not fully understood/tested.

Robinhood Gold

91 points by sam9 10y ago

Splendor 10y ago

I love Robinhood. The idea of trading on credit gives me the heebie jeebies though.

nsrivast 10y ago
Think of it as acquiring technical debt. Can help you grow faster, but need to monitor it carefully to prevent eventual trouble.
- cbhl 10y ago
  It's not technical debt, it's just debt debt. Can help you grow twice as fast, but you can lose twice as fast, too.
- sgndnsg 10y ago
  For the love of Turing, please stop trying to apply this buzzword to everything.
- matthewowen 10y ago
  Using technical debt as a metaphor for debt is... I wish I could use the "100" emoji here.
  - bobbyi_settv 10y ago
    http://www.theonion.com/blogpost/im-like-a-chocoholic-but-for-booze-10739 http://www.theonion.com/blogpost/im-like-a-chocoholic-but-fo...
zeusk 10y ago
You're worried about 20k credit line for trading? Look into margin trading and leveraged ETNs or ETFs, or naked options trading if you're feeling adventurous.
- soVeryTired 10y ago
  Yes, the financial world offers an interesting variety of ways to blow yourself up if you don't know what you're doing.

pierotofy 10y ago

Robinhood is great. I'm hoping they will go forward with a public API, and perhaps allow options trading soon.

nerdwaller 10y ago
I think the margin accounts (gold) is the first step toward allowing Options trading. Excited for this to happen as well. Glad to see a company finally doing a more subscription based model for stock trading instead of the pay per trade rubbish to date.
- 15155 10y ago
  I would not want to trade options on a platform that: 1) Doesn't allow limit orders 2) Goes down with even modest spikes in intraday volatility 3) Markets and caters to "uninformed" flow I imagine they'll only allow long options or impossible-to-break spreads to limit their risks, if they actually go this route (as evidenced by the severely limited margin given with RH Gold).
  - vinay427 10y ago
    > 1) Doesn't allow limit orders They certainly allow basic limit orders for buying and selling in my experience, though not the fancier types (conditionals, etc.).

blacktulip 10y ago

So when exactly can we UK people use Robinhood?

riffraff 10y ago
I wonder if the whole Brexit thingy had any effect in delaying the operation. But the expansion to Australia was more than a year ago, so probably there is something else going on.
- jazoom 10y ago
  I signed up when they announced but I never heard back from them. I just assumed they gave up on Australia.
repsilat 10y ago
I live in the US and I wasn't able to sign up... Good luck.

deleted 10y ago

[deleted]

koolba 10y ago

> Pre & After Trading Hours: Once reserved for institutional investors, extended trading hours let you trade before the opening bell and well after the closing bell — an extra two and a half hours of access, every day. Pre/post market trading is different than normal hours. The liquidity is totally different and generally done with only limit orders. If you don't understand what those are, you shouldn't be doing it. > Additional Buying Power: Gold Buying Power is money that we lend to you to buy stocks, giving you the equivalent of a line of credit for the stock market. You get up to 2x your buying power so you can invest more, and keep any profits. More information on our Help Center. This is called a margin account. It's interesting that they don't call it that. > Bigger Instant Deposits: Take advantage of Instant Reinvesting, which lets you access proceeds from a stock sale immediately, and Instant Deposits, which eliminates the three day wait period for funds to transfer from your bank into Robinhood. Again, this is called a margin account. The way it works is rather than waiting for the prior trade to settle (i.e. the counter party to the trade provides the cash and you deliver the stock), your broker spots you the expected proceeds so that you can trade as if you already have the cash. Scrolling down is the details, terms, etc. I can't tell if making it a different color so you don't notice it's there is intentional or just stylistic choices by their designers. Going to their help pages[1] I found this: > Do I get charged interest on top of the monthly charge for using Gold buying power? > No! You will not get charged interest or fees in addition to the fixed monthly charge of the tier you selected. I'm genuinely curious how they have the capital to do this. Can I open an account and use double buying power to purchase a money market ETF? [1]: https://support.robinhood.com/hc/en-us/articles/213262686-Robinhood-Gold-Buying-Power https://support.robinhood.com/hc/en-us/articles/213262686-Ro...

pooper 10y ago
>> Additional Buying Power: Gold Buying Power is money that we lend to you to buy stocks, giving you the equivalent of a line of credit for the stock market. You get up to 2x your buying power so you can invest more, and keep any profits. More information on our Help Center. > This is called a margin account. It's interesting that they don't call it that. This is just my guess but the phrase "buying on margin" probably doesn't test well among barely financially literate people like me. Without a formal education in economics, one of the things I've read is that buying on margin during the roaring twenties magnified the effect of the great depression (if it wasn't one of the causes outright). I am not affiliated with Robinhood. This is just a guess.

sargun 10y ago

Does anyone know of any brokerage that allows me to buy shares from an individual (after exercising them from $STARTUP)?

mikkom 10y ago
Why would you need brokerage for that?
- therein 10y ago
  Perhaps an exchange.
- sargun 10y ago
  Let's say if I wanted to buy shares from a competing company to hedge my bets. I imagine they wouldn't want to sell to me directly.

83457 10y ago

I know that robinhood is trying to improve things (I guess) but just remember folks that somewhere around 80-90% of retail traders lose money. https://news.ycombinator.com/item?id=12339076 https://news.ycombinator.com/item?id=12339076

platz 10y ago
What is improvement exactly, better ux?
- solaarphunk 10y ago
  At the most basic level, retail traders are paying 8 bucks every time they enter or exit a position, which leads to reasonably significant underperformance versus not having to pay trade commissions on Robinhood.
  - platz 10y ago
    Is that an $8 commission fee per stock trade or an $8 loss on the bid/ask spread? If the former that is definitely the high bar. there are many places (discount brokers) that offer low comissions on stock ttandes more in the 1 dollar range.. or even pennies, that arent 'disruptors'. I think if you are trading often enough thay $1 commission is a problem you'e doing it wrong. Presumably we are talking about folks that are not pattern-day-traders.
    - yummyfajitas 10y ago
      That's an $8 commission. I know Interactive Brokers offers less, but they also charge $30/month prorated against your commissions. What other discount brokers charge pennies or $1?
      - platz 10y ago
        Ok, Looking around now the fees are higher for stock than i remembered.. so excluding IB yeah the cheapest I know of is optionshouse/tradeking at $5 for stocks.

mikkom 10y ago

Interestingly they promised shorting when margin accounts are available. I don't see shorting on that list. https://twitter.com/robinhoodapp/status/581924425244655616 https://twitter.com/robinhoodapp/status/581924425244655616

hartator 10y ago

Subscribed to Gold yesterday, I don't like trading on margin but after hours is nice.

15155 10y ago
How and why do you trade after hours without limit orders? Execution on RH is already pretty poor, this seems like a recipe for disaster.
- jwcooper 10y ago
  > Execution on RH is already pretty poor, this seems like a recipe for disaster. Can you explain this? I like Robinhood for the free ETF and index trades. Haven't really noticed any issues in the year I've been using it.
- fma 10y ago
  RH needs to make money somehow.
- cheriot 10y ago
  The article recommends only trading after hours with a limit. Edit: Sorry, I saw that in the help center, https://support.robinhood.com/hc/en-us/articles/214681903-Extended-Trading-Hours https://support.robinhood.com/hc/en-us/articles/214681903-Ex..., "That means your execution price can vary more than during core market hours, so we suggest using limit prices".
- hartator 10y ago
  From my underatanding, they are using the same exchanges than other low cost brokers. It has been confirmed with my experience using TradeKing in parallel of RobinHood (same spreads and same speed of execution.) I haven't tried trading after hours yet, but it had happenned to me that I wish I had the option in the past.
  - hendzen 10y ago
    The actual orders are handled by Apex Clearing. Apex sells this client flow to a mix of Citadel, KCG, and a few others [0]. [0] - https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal/RHF%20PFO%20Disclosure.pdf https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal...

HoyaSaxa 10y ago

When Robinhood was first announced a few years ago, I was excited that the retail brokerage industry was becoming more accessible for a number of reasons. Most obviously, we live in a capitalistic society, and inherently those who are able to make an equity investment (whether it be in a home, a small business, a startup, or a publicly listed company) are giving themselves a better chance at long-term financial freedom if they are also able to properly diversify their investments. Robinhood still provides a great service to those who have a relatively small amount of money to create a diversified custom portfolio, but I would highly recommend against Robinhood Gold in today's interest rate environment. If you are 25 or younger, which is a core demographic of Robinhood, you are much better of with Interactive Brokers for any type of margin account. The UI/UX leaves a lot to be desired, but you will likely save a lot of money. Let's say that you have $2000 to invest and want to borrow another $1000 for a total investment of $3000. Since you understand the importance of long term investing as well as diversification, let's assume you are going only going to make 10 trades per year (if you are making more than 10 trades per year with a $3000 account you should seriously reconsider your investment strategy). For simplicity, let's also assume your portfolio balance maintains a $3k balance. Each year you will pay: Interactive Brokers: (max($1 x trades per month, $3) * 12) + 1.9% * $1000 = $55 per year Robinhood: $6 * 12 = $72 Of course, this is a very specific comparison, but I encourage you to look at the total cost of a margin account for your specific situation: https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal/RHF%20Retail%20Commisions%20and%20Fees%20Schedule.pdf https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal... https://www.interactivebrokers.com/en/index.php?f=1595 https://www.interactivebrokers.com/en/index.php?f=1595 I would also highly discourage anyone from trading outside of 9:30 AM to 4PM ET unless there was major news on a specific company (up to 4:15PM for the most actively traded etfs given the futures market keeps the bid/ask spreads tight). Finally, I would encourage you to read more about the systemic risks ETFs pose to the market before deciding to use them as an investment vehicle. They provide great utility to small investors, but also contribute to liquidity risks that are still not fully understood/tested.