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I use Robinhood daily and love it. Low level traders could care less if HFT are making a penny off them. Also you can put limit orders....... No way I could

I use Robinhood daily and love it. Low level traders could care less if HFT are making a penny off them. Also you can put limit orders....... No way I could trade the way I do and still make money if I was paying 7$ or more per trade. Crazy the industry can charge that much.

omarforgotpwd 9y ago
Same exact situation here. Because I put in lots of relatively small dollar value trades $10 transaction fees at TD Ameritrade would eat all my profits pretty quickly.
- The_Hoff 9y ago
  Still a lot, but TD dropped their fee to $6.95 https://www.tdameritrade.com/pricing.page https://www.tdameritrade.com/pricing.page
  - auganov 9y ago
    And Fidelity is at $4.95 which is the lowest for big brokerages I think https://www.fidelity.com/why-fidelity/pricing-fees https://www.fidelity.com/why-fidelity/pricing-fees
    - spelunker 9y ago
      Schwab dropped to the same. If anything Robinhood has benefitted everyone because it's pricing model has pressured other brokerages to lower fees.
      - ceejayoz 9y ago
        Don't give Robinhood the credit - fees have been dropping for decades. http://www.businessinsider.com/historical-trading-commissions-2014-3 http://www.businessinsider.com/historical-trading-commission...
harryh 9y ago
This is a good time to trot out that old tech company adage: if you aren't paying for the product, you are the product. How does Robinhood make money? By selling order flow to market makers. Why do market makers want Robinhood's order flow? Because Robinhood's customers are, collectively, unsophisticated investor with no particular knowledge about the future performance of a stock making them the perfect customers for purchasing liquidity a penny at a time. Worth keeping in mind as you trade stocks every day.
- metalliqaz 9y ago
  And why is that a bad thing? If I make a couple of $100 trades in a day and make $10, what do I care if the pros used me for liquidity? I believe the same would happen even if I was paying $7 at Fidelity to make the trades. Not trying to be argumentative, just want to make sure I understand the conversation here.
  - harryh 9y ago
    Most Robinhood customers will not reliably make more money trading every day than they would buying and holding Vanguard Index funds ($VTI is a good place to start).
    - JBReefer 9y ago
      Given how frequently this is said, I'm shocked that people still don't get it. The only way you know more than analysts is: A. be a full time analyst B. work at the company you're trading If you're on Robinhood, you're not A. And if you're B, you're in touchy legal waters. The average unsophisticated trader loses money vs those ETFs in even small time frames.
      - devopsproject 9y ago
        > The only way you know more than analysts is is to flip a coin: https://finance.yahoo.com/news/coin-flip-beats-listening-wall-203001989.html https://finance.yahoo.com/news/coin-flip-beats-listening-wal... Now you could argue that diversification is key and that the best way to diversify is to choose an index vs picking your own asset mix. But deifying analysts is absurd

omarforgotpwd 9y ago

Same exact situation here. Because I put in lots of relatively small dollar value trades $10 transaction fees at TD Ameritrade would eat all my profits pretty quickly.

The_Hoff 9y ago
Still a lot, but TD dropped their fee to $6.95 https://www.tdameritrade.com/pricing.page https://www.tdameritrade.com/pricing.page
- auganov 9y ago
  And Fidelity is at $4.95 which is the lowest for big brokerages I think https://www.fidelity.com/why-fidelity/pricing-fees https://www.fidelity.com/why-fidelity/pricing-fees
  - spelunker 9y ago
    Schwab dropped to the same. If anything Robinhood has benefitted everyone because it's pricing model has pressured other brokerages to lower fees.
    - ceejayoz 9y ago
      Don't give Robinhood the credit - fees have been dropping for decades. http://www.businessinsider.com/historical-trading-commissions-2014-3 http://www.businessinsider.com/historical-trading-commission...

harryh 9y ago

This is a good time to trot out that old tech company adage: if you aren't paying for the product, you are the product. How does Robinhood make money? By selling order flow to market makers. Why do market makers want Robinhood's order flow? Because Robinhood's customers are, collectively, unsophisticated investor with no particular knowledge about the future performance of a stock making them the perfect customers for purchasing liquidity a penny at a time. Worth keeping in mind as you trade stocks every day.

metalliqaz 9y ago
And why is that a bad thing? If I make a couple of $100 trades in a day and make $10, what do I care if the pros used me for liquidity? I believe the same would happen even if I was paying $7 at Fidelity to make the trades. Not trying to be argumentative, just want to make sure I understand the conversation here.
- harryh 9y ago
  Most Robinhood customers will not reliably make more money trading every day than they would buying and holding Vanguard Index funds ($VTI is a good place to start).
  - JBReefer 9y ago
    Given how frequently this is said, I'm shocked that people still don't get it. The only way you know more than analysts is: A. be a full time analyst B. work at the company you're trading If you're on Robinhood, you're not A. And if you're B, you're in touchy legal waters. The average unsophisticated trader loses money vs those ETFs in even small time frames.
    - devopsproject 9y ago
      > The only way you know more than analysts is is to flip a coin: https://finance.yahoo.com/news/coin-flip-beats-listening-wall-203001989.html https://finance.yahoo.com/news/coin-flip-beats-listening-wal... Now you could argue that diversification is key and that the best way to diversify is to choose an index vs picking your own asset mix. But deifying analysts is absurd