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Pretty skeptical about the value here. >A Gold subscription lets users borrow up to double the money in their account to trade on margin with leverage Users p
by pillowkusis 9y ago
Pretty skeptical about the value here.
>A Gold subscription lets users borrow up to double the money in their account to trade on margin with leverage
Users pay money to be loaned money? How is this different than a microloan service?
>Robinhood also earns money from rebates its gets for directing its order flow to broker dealers
That means, presumably, the dealers are profiting in some way by handling trades from investors less informed than themselves.
At the end of the day, Robinhood may not have trading fees, but the underlying brokers it works with do. I don't see how a microloans service and some kickbacks are enough to compensate. Presumably they are hemorrhaging money right now and the VC money is subsidizing novice investor's trading fees.
Despite the name "Robinhood" like this is giving money to the poor, this service seems extremely predatory to its users, offering them cheap loans to gamble with on the stock market and taking kickbacks from the exact type of people Robin Hood was stealing from.
- pgodzin 9y agoThere are also other benefits that the Gold service provides, such as after-hours trading. As they become more feature-complete compared to established brokers, those new features will likely be exclusive to Gold members. I also think they are able to invest non-invested money in people's accounts for short-term small percentage gains
- behrlich 9y agoThe monthly fee for "gold" does seem a bit strange. But it gives you more than just margin. From https://support.robinhood.com/hc/en-us/articles/214681823-Introducing-Robinhood-Gold https://support.robinhood.com/hc/en-us/articles/214681823-In... you also get instant settlement, instant deposit, and extended trading hours, which seems like something worth paying for. As for "micro loans" - how is this any more predatory than a margin account at any other brokerage?
- wufufufu 9y agoGold subscription is a fixed monthly cost whereas microloan services are interest based. https://support.robinhood.com/hc/en-us/articles/214681823-Introducing-Robinhood-Gold https://support.robinhood.com/hc/en-us/articles/214681823-In...
- onchance 9y agoBut the “fixed” monthly cost varies depending on the size of your credit line, so there is an effective interest rate of 5% or more. https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal/Robinhood%20Gold%20Pricing.pdf https://d2ue93q3u507c2.cloudfront.net/assets/robinhood/legal...