10 ms·
Stock-trading app Robinhood was rejected by 75 investors
- pietroglyph 8y agoThe 75 rejections number doesn't seem to mean anything without some context... Maybe the mean for companies with similar valuations over similar time frames is 300 initial rejections, and this is actually an outlier.
- notimetorelax 8y agoIs there anything like that available in Europe? In particular in Switzerland? I checked what my bank, Postfinance, wants to charge for a brokerage account - it's in multiple hundreds of dollars. EDIT: Thanks to All for the responses! The offered options seem to be much better than my bank. - Interactive brokers - DeGiro - Lynx
- gst 8y agoIf you have larger sums to invest (or if you trade a lot) Interactive Brokers could be an option. Also there are a number of other European brokers - e.g., DeGiro and Lynx.
- chillydawg 8y agoInteractive brokers are a cheap European shop. Not free to trade but very cheap and they give you access to a lot of big markets.
- gst 8y agoIB is not European but based in the US. I would also recommend it but tax could be somewhat more complicated (W-8BEN form, etc.).
- tehlike 8y agoInteractive brokers is probably the best brokerage out there. Used 3-4 others, but IB is the simplest and also most featureful one for sure.
- peterbraden 8y agoI strongly disagree. Their reporting is convoluted, their interface terrible, their support is horrible. I've tried half a dozen brokerages over time, and IB is by far the worst.
- tehlike 8y agoWhat's your favorite? I actually found their app pretty simple, but hat might be because i'm an engineer & tend to understand what i am seeing in IBKR app and web site. Reporting wise, they are the most capable - i needed to apply for a loan, and wanted to hide the list of all securities, i was able to create just that. Pretty flexible, and powerful.
- peterbraden 8y agoTry getting a list of transactions, or working out what you are paying with a margin account. Their reporting is inscrutable. On top of this, their recommended way of buying USD securities with a foreign base currency account is to short the forex in order to tie your margin to the exchange rate at purchase. I'm also an engineer, but I know a bad UI when I see one. Pretty much any other brokerage lets you see a clear historical list of transactions, balances and fees, without having to configure a complex report or jump through any hoops.
- michaelcampbell 8y agoHow do THEY make money? The article didn't say, or I missed it.
- cdelsolar 8y agospread
- stochastic_monk 8y agoWhat does that mean, for those of us not in finance?
- throwaway4job 8y agoHe’s referring to the spread between bid and ask prices, but he’s wrong, so you can safely ignore him.
- xcasperx 8y agoThe spread (bid-ask spread) is the difference between the bid (what the seller is willing to accept to sell it) and the ask (what the buyer is willing to pay for it). When you buy a stock, you're buying at the ask price, when you sell you're selling at the bid price. The difference is what the clearer keeps. https://www.investopedia.com/terms/b/bid-askspread.asp https://www.investopedia.com/terms/b/bid-askspread.asp
- pgwhalen 8y agoThis is mostly correct except for the last sentence, for any conventional definition of "clearer." You could replace "clearer" with "market maker" to be more correct, but it is important to note that the market maker isn't earning the spread every time they trade with you. They're only earning the spread in the aggregate, which is to say that they hope to both buy and sell with many people like you so that over time they are effectively earning the spread.
- frutiger 8y ago
- mrfusion 8y agoI never “got it”. It’s just a brokerage like etrade? Those places charge under ten dollars per trade. What’s the big draw for zero fees? It’s not like you buy stocks that often.
- JumpCrisscross 8y agoBrokerage is a book business. Robinhood is collecting a book of young customers (whom traditional brokerages have not been successful attracting) who frequently trade and use margin (which makes them lucrative).
- CamTin 8y agoCan you explain what the phrase "book business" means?
- JumpCrisscross 8y ago> Can you explain what the phrase "book business" means? You accumulate a “book” of end customers, usually from a particular demographic, for the purpose of selling to someone who doesn’t have that demographic. Versus flow (e.g. exchanges) or asset accumulation (e.g. ETFs) businesses.
- KKKKkkkk1 8y agoSounds like the business model is to accumulate a base of customers and then to sell the business to some kind of Bank of Wells Fargo who will then proceed to phase out the no-fee service.
- adrr 8y agoThey don’t have enough capital to trade frequently on margin accounts. $10 billion assets and 3 million users puts the average account has little over $3k. E*TRADE has $300 billion for the same number of users.
- laser 8y agoIf someone with $30,000 in savings makes 30 stock transactions per year at $10 a trade, they’ve lost 1% of their total to fees, $300. If they’re expecting 7% annual returns that ends up reducing earnings by 14% per year. The math for the masses is pretty straightforward.
- ironjunkie 8y agoI tried them and it is the most amateurish stock broker I have ever touched in my life. There are no metrics for any of the stocks. The graphs are not annotated, the spread seems to be inflated (as they probably make money with it). Also as said higher in the comments, if you are not paying you are most probably the product. And I don't want my private investment informations to be sold as data to BigCo. Paying x$ per transaction is a small price to pay to not have your data all over. They might be a good answer for newbies that want to spend 100$ on a stock for the first time, but for anything else I will stay with Ameritrade. Thanks
- mortehu 8y ago> the spread seems to be inflated (as they probably make money with it) The Order Protection Rule of Regulation NMS makes this illegal (during regular trading hours).
- csomar 8y agoYeah am wondering if the OP means that robinhood is playing privileged market maker?
- deleted 8y ago[deleted]
- Teodolfo 8y agoExecution quality matters and given enough order flow a they can still match client orders to make a profit without giving a worse price than NBBO.
- physguy1123 8y agoThat's easier said than done. If you don't already have proper market making infrastructure and strategies you'll probably lose money trying to do that. Add in market makers paying per order and it doesn't make sense
- paulpauper 8y ago
- deleted 8y ago[deleted]
- gst 8y agoThe one feature that I'm really missing from Robinhood is selling based on Spec-ID instead of just FIFO. FIFO means I won't be able to tax-loss harvest making Robinhood effectively much more expensive than the alternatives (as the additional taxes are much higher than what I would save in trading fees).
- laser 8y agoWhy isn't Spec-ID/FIFO completely automatic by default? The fact such an immaterial determination can have such a financial impact is absurd, but isn't the obvious solution for brokers to automatically do FIFO or Spec-ID based on which is more profitable for their clients? As far as I can tell the greedy algorithm would be pretty straightforward and effective.
- im3w1l 8y agoCan you explain what this means?
- radicality 8y agoIf you’ve been holding stock for more than a year and then sell, it will be taxed at a lower capital gains rate. If you sell sooner, it will be taxed at an ordinary rate. If you have stock at a brokerage and you want to sell it, FIFO is first in first out. The brokerage will sell the oldest shares you own. It sometimes makes more sense to sell a specific set of shares you bought later depending on purchase price and current price. For example a FIFO sell could generate taxes while a specific lot sell could generate no taxes (you sold at a loss).
- dawhizkid 8y agoThey haven’t “won” anything yet...a high private unicorn valuation doesn’t mean success. I would really caution connecting your bank account through Plaid on RH. It’s really unclear what data they are collecting but their privacy policy suggests they are collecting your bank account transaction history using Plaid’s API. 100% a dealbreaker for me.
- hartator 8y agoThey do? I had no idea about that.
- dawhizkid 8y agoExactly.
- davidiach 8y ago>They haven’t “won” anything yet...a high private unicorn valuation doesn’t mean success. We could debate what "success" means endlessly, but if you're a VC, your job is to put money in companies with low valuations that will eventually end up with high valuations.
- dawhizkid 8y agoSuccess generally means a future liquidity event...an IPO with a sustained share price well above what you bought in for or a sale.
- sib 8y agoI think the idea is that, since RH hasn't been acquired or gone public, they haven't yet "ended up" with a high valuation. It could all go away before the investors can get liquid (e.g., Theranos for a pathological example).
- JumpCrisscross 8y agoThere are deep secondary markets around late-stage venture-backed companies. Robinhood investors seeking to exit around this valuation have options.
- j45 8y agoRejection can also mean a sign the investors didn't understand the idea, opportunity, or the ability.
- deleted 8y ago[deleted]
- pepsiekhan 8y agoi dont understand how this site works , but i too am convinced a hospital hacked my phone but trying to prove it is horrendous, will go throughthe propper channel next time.
- perpetualcrayon 8y agoI think I see some flaws in how we automatically label a company's value based on how much an investor is willing to invest. Why isn't a startup's "value" pegged to real metrics? So in that sense, an investor is free to invest more, but they can't automatically raise the company's value simply by the fact that they were willing to invest more. Semantically I guess it's accurate, but we really should come up with a better way, or different words, to explain what it really means. Distilling it down to "a company's value is X" is extremely misleading IMO.
- deleted 8y ago[deleted]
- ford0060 8y agoWith over 10 years of experience helping people acquire, recover and stay in their homes and expand/start their business. We help new entrepreneur and smart business owners to grow with adequate finance. Ford Credit Centre offers business loans to help you grow your business. We give out all kind of loan like Educational loan, Business loan, home loan, Agricultural loan, Personal loan, auto loan and other good Reason, I also give out loans from the rang of $5,000USD- $5,000,000USD at a 3% interest rate. Duration of 1- 15 years depending on the amount you need as loan. Get back to us for more information WhatsApp:+1 404 400 4210 www.fordcreditcentre.com