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I haven’t really investigated it too hard. I use Robinhood because it has 0 fees for stocks, options, and crypto (but I’ve mostly moved on to an exchange that l

I haven’t really investigated it too hard. I use Robinhood because it has 0 fees for stocks, options, and crypto (but I’ve mostly moved on to an exchange that lets me withdraw crypto). I also use Robinhood because it has 2.5% interest for margin (with 6% interest on the first $1000, counting the $5/month Robinhood Gold fee). And also, instant deposits. I’ve found the UI to be pretty poor in some respects.

Hedgemaster 5y ago
Thanks, the issue with Robinhood imo is that their price execution is quite poor and you pay extra on the bid-ask spread.. kind of a hidden fee in a way. Plus they don't have any relevant tools that would help to make a well-informed decision.
midnitewarrior 5y ago
Robinhood is for unsavy traders lured in by (false) advertising for saving money on trading. While they advertise no fees for trading, their poor execution means you get pricing that's far worse than normal trading fees.
- CheezeIt 5y ago
  I am pretty sure it does not mean that you get a price that’s “far” worse. You would need to quantify such a claim — a number I see from the SEC comes down to $1 per user (as a _lower_ bound on total extra cost, weakening my argument). I’m not a day trader — almost all my money is in long term held stocks and crypto — so margin interest rate is all that matters. (For options, I don’t think I suffered any execution issues, because it almost always has involved a limit order in a low volume option.)
  - Hedgemaster 5y ago
    IMO the main disadvantage of Robinhood is not their execution quality (which is relatively low) but complete absence of any helpful tools to make a well-informed decision. You cannot easily see what options are over or under-priced IV-wise. It also does not notify of any important events that might affect your options positions. For example, when someone owns a deep ITM call and ex-dividend date is approaching, it might make sense to exercise that call and buy an identical OTM put. But most retail traders are unaware of such technicalities and therefore in the long run sustain losses caused primarily by such basic mistakes..
    - CheezeIt 5y ago
      I totally agree with this, though I have to wonder how many retail options traders with advanced features are really making money.

Hedgemaster 5y ago

Thanks, the issue with Robinhood imo is that their price execution is quite poor and you pay extra on the bid-ask spread.. kind of a hidden fee in a way. Plus they don't have any relevant tools that would help to make a well-informed decision.

midnitewarrior 5y ago

Robinhood is for unsavy traders lured in by (false) advertising for saving money on trading. While they advertise no fees for trading, their poor execution means you get pricing that's far worse than normal trading fees.

CheezeIt 5y ago
I am pretty sure it does not mean that you get a price that’s “far” worse. You would need to quantify such a claim — a number I see from the SEC comes down to $1 per user (as a _lower_ bound on total extra cost, weakening my argument). I’m not a day trader — almost all my money is in long term held stocks and crypto — so margin interest rate is all that matters. (For options, I don’t think I suffered any execution issues, because it almost always has involved a limit order in a low volume option.)
- Hedgemaster 5y ago
  IMO the main disadvantage of Robinhood is not their execution quality (which is relatively low) but complete absence of any helpful tools to make a well-informed decision. You cannot easily see what options are over or under-priced IV-wise. It also does not notify of any important events that might affect your options positions. For example, when someone owns a deep ITM call and ex-dividend date is approaching, it might make sense to exercise that call and buy an identical OTM put. But most retail traders are unaware of such technicalities and therefore in the long run sustain losses caused primarily by such basic mistakes..
  - CheezeIt 5y ago
    I totally agree with this, though I have to wonder how many retail options traders with advanced features are really making money.