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It’s not just crypto, apps like Robinhood also grant access to instruments and trading that were only accessible to sophisticated or high net worth investors pr

It’s not just crypto, apps like Robinhood also grant access to instruments and trading that were only accessible to sophisticated or high net worth investors prior to that which can also cause a lot of problems for people who don’t know what they are doing and trying to follow some WSB get rich quick fad. There is a reason why the terms “sophisticated investors” and “high net worth investors” are defined and regulated in most if not all jurisdictions, it’s to protect people from being overly exposed to high risk and being preyed upon and prevent society form picking up the bill.

dan-robertson 4y ago
Discount brokerages have existed for a long time and brokerages in general even longer. I don’t know what products you think only became available via Robinhood that weren’t available through eg interactive brokers or Schwab before. That said, there was a fee to trade which made small orders more expensive and maybe Robinhood encourages people to try more risky things (eg options)?
- dogma1138 4y ago
  This isn’t about discounted brokerages it’s about what kind of positions and types of trades you are allowed to open, and do you or do not get access to leverage. This isn’t about someone buying stocks more easily and cheaply this is about opening a complex leveraged position on some esoteric derivative that the 500 layers turned traders who came up with don’t even understand that can put you in the red for sums orders of magnitude larger than what you are investing in the first place. We’ve learned the hard way that we need to limit the risk exposure of traders by both their experience and ability to take on losses and yes Robinhood cuts through that wall quite effectively.
  - dan-robertson 4y ago
    Maybe I misread your previous comment because it sounded to me like you were making a claim about new things robinhood was giving people access to and that’s why I pointed out that I don’t think those things are really new or unique to the recent app-based brokerages. Regarding what you wrote above: I don’t really know what you mean by esoteric derivatives? Are you talking about single-stock options or various futures or ETNs or maybe VIX derivatives? FWIW, I think retail options trading isn’t great for almost anyone doing it, and I think people trade single stocks too much too. I think most ETFs/ETNs are ok but others might disagree about e.g. 3xS&P500 or whatever. There are other exceptions. However these things aren’t new to robinhood. It’s been possible to trade those things (albeit without fireworks, and maybe with some kind of annying approval process) at plenty of discount brokerages for a long time. Crypto is a bit of an exception. Maybe there are other things one can trade at Robinhood and not elsewhere?

dan-robertson 4y ago

Discount brokerages have existed for a long time and brokerages in general even longer. I don’t know what products you think only became available via Robinhood that weren’t available through eg interactive brokers or Schwab before. That said, there was a fee to trade which made small orders more expensive and maybe Robinhood encourages people to try more risky things (eg options)?

dogma1138 4y ago
This isn’t about discounted brokerages it’s about what kind of positions and types of trades you are allowed to open, and do you or do not get access to leverage. This isn’t about someone buying stocks more easily and cheaply this is about opening a complex leveraged position on some esoteric derivative that the 500 layers turned traders who came up with don’t even understand that can put you in the red for sums orders of magnitude larger than what you are investing in the first place. We’ve learned the hard way that we need to limit the risk exposure of traders by both their experience and ability to take on losses and yes Robinhood cuts through that wall quite effectively.
- dan-robertson 4y ago
  Maybe I misread your previous comment because it sounded to me like you were making a claim about new things robinhood was giving people access to and that’s why I pointed out that I don’t think those things are really new or unique to the recent app-based brokerages. Regarding what you wrote above: I don’t really know what you mean by esoteric derivatives? Are you talking about single-stock options or various futures or ETNs or maybe VIX derivatives? FWIW, I think retail options trading isn’t great for almost anyone doing it, and I think people trade single stocks too much too. I think most ETFs/ETNs are ok but others might disagree about e.g. 3xS&P500 or whatever. There are other exceptions. However these things aren’t new to robinhood. It’s been possible to trade those things (albeit without fireworks, and maybe with some kind of annying approval process) at plenty of discount brokerages for a long time. Crypto is a bit of an exception. Maybe there are other things one can trade at Robinhood and not elsewhere?