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I've been using Robinhood for the past year, and I hope they add basic features such as: - The ability to short a stock, which I still can't believe isn't avai

I've been using Robinhood for the past year, and I hope they add basic features such as: - The ability to short a stock, which I still can't believe isn't available. - Price Alerts Everything else is gravy, IMO, especially if they keep the same basic, sleek interface, which I actually like.

throwaway5752 7y ago
Is there a way to allow shorts without having to manage margin and having to carry risk on the balance sheet? They have to deal with two counterparties (you, and whomever is lending you the shares). I am not sure how they could economically offer free short trades.
- stephengoodwin 7y ago
  Not that I'm aware of. The only alternative would be to permit shorting if the user has a Long Put for defined risk protection. You could always to a synthetic short through buying a Long Put, but time (and often volatility) decay become a factor (for shorter term trades).
  - stephengoodwin 7y ago
    Correction: Should be Long Call for the first scenario: defined risk protection (for shorting), not Long Put.
- tim333 7y ago
  You'd probably have to charge something like a borrowing cost. There isn't really a risk free way to do it - if you short a stock and it goes up 100x then there's a liability there and if the customer can't pay up then the broker is stuck with it.
- hakanito 7y ago
  On BitMEX you can make leveraged short/long bitcoin trades without the downside of owing more than you put in. Max you can lose is 100%. It’s powered by a purpose-built stoploss liquidation engine
  - robjan 7y ago
    Stoploss only works under fairly stable market conditions. If the sell orderbook suddenly starts to get a lot bigger than the buy side then it's likely that the price will fall below your limit price before the order fills.
- steven2012 7y ago
  For a brokerage managing short position risks are exactly the same as managing long positions. And the implementation is the same too. Do real-time checks and once a position has lost more than X%, sell the position immediately. The biggest problem presumably for Robinhood is managing the borrowing of the shares. They're probably not large enough to have a pool of shares to consistently borrow from like other larger brokerages.
brianchu 7y ago
Shorting a stock is not a basic feature, it's an advanced feature for power users. You can buy put options on Robinhood already.
- AznHisoka 7y ago
  It's a feature available if you request it for most brokerages. That's what I consider a basic feature.
- steven2012 7y ago
  It's absolutely a basic feature. It's the opposite of buying a share, and your profit/loss is easy to calculate. With options, you need to worry about premium, time decay, spreads and lower liquidity, etc.
  - smileysteve 7y ago
    Shorting is very arguably more complicated than put options; Key factors are dividends, float, and short interest. From a brokerage house perspective, it's a whole other marketplace to set up (brokers willing to back your interest)
    - webninja 7y ago
      Fair points but at least you don’t have to worry about changes in implied volatility (Vega) when shorting. You can buy a put option right before an earnings report and watch it’s implied volatility drop like a rock after the earnings report is released. This can remove any profit you would’ve made pretty straightforwardly with a short. Not to mention you also have to pay Theta (time-decay value) all while holding the put option.
smegmasamurai 7y ago
price alerts are high on my list of basic features i'm hoping they'll add; another is trailing stop loss %. currently i feel like i have to watch my positions like a hawk if i want to execute any type of exit strategy.
hbosch 7y ago
> The ability to short a stock, which I still can't believe isn't available. Honest question: is having access to shorting THAT much different than having the ability to buy puts/sell calls? Shorting isn't the only way to profit in a bear position
- steven2012 7y ago
  Yes, a pure short position is much cheaper than buying puts. You pay a lot of premium with options and almost no premium with shorts, depending on what the rate to borrow is. Also, liquidity is much better as are spreads. It makes a huge different to the profitability of a trade.
- nodesocket 7y ago
  Everytime I've bought PUTS its been a losing proposition; Kodak and Beyond Meat (don't want to talk about it). So, I made a hard and steady rule for myself, no more buying PUT options. Instead, just find high quality companies I want to go long on. It's much easier to pick winners than trying to predict losers and the timeframe. I am a big opponent of shoring and buying PUT options.
  - webninja 7y ago
    Want to give it another chance with $TLRY and $CHWY? :D They’re both heading down but you might still (or might not) lose money if the option’s market has already anticipated and priced in the drop. You might also still lose money if IV decreases. Maybe try it with a paper trading account?
tehlike 7y ago
Did you try interactive brokers?
alinspired 7y ago
you can approximate short with inverse funds, like SH, PSQ
webninja 7y ago
You can already create a synthetic short position on Robinhood using options. Between a wide call option credit spread and a put option on the same date, you can short it. Selling a call option and buying a put option at the same strike price creates the synthetic short. By buying the call option with the highest strike price for the same date or later, Robinhood lets you skip the safety requirement of holding 100 shares of the underlying stock because you’ve capped your max-potential-loss to a fixed amount. Understand that with shorting a stock, you have limited potential gains and unlimited potential losses. Example synthetic short with the S&P500 Index ETF ($SPY) at $299/share currently: Create Call credit spread by selling June 18th 2021 calls at $300 strike for $24.95/ea and buying June 18 2021 calls at at the highest possible strike of $390 for $1.39/ea. Then buying the June 18th 2021 Put option at the same strike price of $300 for $24.95/ea.

throwaway5752 7y ago

Is there a way to allow shorts without having to manage margin and having to carry risk on the balance sheet? They have to deal with two counterparties (you, and whomever is lending you the shares). I am not sure how they could economically offer free short trades.

stephengoodwin 7y ago
Not that I'm aware of. The only alternative would be to permit shorting if the user has a Long Put for defined risk protection. You could always to a synthetic short through buying a Long Put, but time (and often volatility) decay become a factor (for shorter term trades).
- stephengoodwin 7y ago
  Correction: Should be Long Call for the first scenario: defined risk protection (for shorting), not Long Put.
tim333 7y ago
You'd probably have to charge something like a borrowing cost. There isn't really a risk free way to do it - if you short a stock and it goes up 100x then there's a liability there and if the customer can't pay up then the broker is stuck with it.
hakanito 7y ago
On BitMEX you can make leveraged short/long bitcoin trades without the downside of owing more than you put in. Max you can lose is 100%. It’s powered by a purpose-built stoploss liquidation engine
- robjan 7y ago
  Stoploss only works under fairly stable market conditions. If the sell orderbook suddenly starts to get a lot bigger than the buy side then it's likely that the price will fall below your limit price before the order fills.
steven2012 7y ago
For a brokerage managing short position risks are exactly the same as managing long positions. And the implementation is the same too. Do real-time checks and once a position has lost more than X%, sell the position immediately. The biggest problem presumably for Robinhood is managing the borrowing of the shares. They're probably not large enough to have a pool of shares to consistently borrow from like other larger brokerages.

brianchu 7y ago

Shorting a stock is not a basic feature, it's an advanced feature for power users. You can buy put options on Robinhood already.

AznHisoka 7y ago
It's a feature available if you request it for most brokerages. That's what I consider a basic feature.
steven2012 7y ago
It's absolutely a basic feature. It's the opposite of buying a share, and your profit/loss is easy to calculate. With options, you need to worry about premium, time decay, spreads and lower liquidity, etc.
- smileysteve 7y ago
  Shorting is very arguably more complicated than put options; Key factors are dividends, float, and short interest. From a brokerage house perspective, it's a whole other marketplace to set up (brokers willing to back your interest)
  - webninja 7y ago
    Fair points but at least you don’t have to worry about changes in implied volatility (Vega) when shorting. You can buy a put option right before an earnings report and watch it’s implied volatility drop like a rock after the earnings report is released. This can remove any profit you would’ve made pretty straightforwardly with a short. Not to mention you also have to pay Theta (time-decay value) all while holding the put option.

smegmasamurai 7y ago

price alerts are high on my list of basic features i'm hoping they'll add; another is trailing stop loss %. currently i feel like i have to watch my positions like a hawk if i want to execute any type of exit strategy.

hbosch 7y ago

> The ability to short a stock, which I still can't believe isn't available. Honest question: is having access to shorting THAT much different than having the ability to buy puts/sell calls? Shorting isn't the only way to profit in a bear position

steven2012 7y ago
Yes, a pure short position is much cheaper than buying puts. You pay a lot of premium with options and almost no premium with shorts, depending on what the rate to borrow is. Also, liquidity is much better as are spreads. It makes a huge different to the profitability of a trade.
nodesocket 7y ago
Everytime I've bought PUTS its been a losing proposition; Kodak and Beyond Meat (don't want to talk about it). So, I made a hard and steady rule for myself, no more buying PUT options. Instead, just find high quality companies I want to go long on. It's much easier to pick winners than trying to predict losers and the timeframe. I am a big opponent of shoring and buying PUT options.
- webninja 7y ago
  Want to give it another chance with $TLRY and $CHWY? :D They’re both heading down but you might still (or might not) lose money if the option’s market has already anticipated and priced in the drop. You might also still lose money if IV decreases. Maybe try it with a paper trading account?

tehlike 7y ago

Did you try interactive brokers?

alinspired 7y ago

you can approximate short with inverse funds, like SH, PSQ

webninja 7y ago

You can already create a synthetic short position on Robinhood using options. Between a wide call option credit spread and a put option on the same date, you can short it. Selling a call option and buying a put option at the same strike price creates the synthetic short. By buying the call option with the highest strike price for the same date or later, Robinhood lets you skip the safety requirement of holding 100 shares of the underlying stock because you’ve capped your max-potential-loss to a fixed amount. Understand that with shorting a stock, you have limited potential gains and unlimited potential losses. Example synthetic short with the S&P500 Index ETF ($SPY) at $299/share currently: Create Call credit spread by selling June 18th 2021 calls at $300 strike for $24.95/ea and buying June 18 2021 calls at at the highest possible strike of $390 for $1.39/ea. Then buying the June 18th 2021 Put option at the same strike price of $300 for $24.95/ea.