Róbinhood® Lógin Account
Robinhood is a financial services company that facilitates individuals to trade cryptocurrencies, exchange-traded funds (ETFs), individual stocks, and options. It offers commission-free trades.
Last updated
Robinhood is a financial services company that facilitates individuals to trade cryptocurrencies, exchange-traded funds (ETFs), individual stocks, and options. It offers commission-free trades.
Last updated
Robinhood disrupted the financial technology industry by charging commission-free trades. It launched in December 2014 with a waiting list of more than 500,000.3 Company founders Vladimir Tenev and Baiju Bhatt, both Stanford physics graduates, believed that Robinhood would motivate a new generation of would-be investors with their mobile platform.4
There are challenges that are inherent with brokerage firms like Robinhood. For instance, one of the main sources of Robinhood’s revenue comes from payment for order flow (PFOF), which the SEC is reviewing.1617 In this practice, brokerage firms receive payments for any client trades directed to market makers. The payments are generally fractions of a penny per share. So while it may not seem as much, it does add up when multiple trades are redirected. If banned, companies like Robinhood would lose a significant revenue stream.
Robinhood has also experienced service interruptions and outages during large influxes of orders made by multiple users at the same time, which was commonly found with trades of highly volatile names. This not only led to customer complaints but also meant that Robinhood had to pay a $70 million settlement—the largest such FINRA penalty—in June 2021 to cover losses experienced due to these outages.18 FINRA had fined Robinhood a much less severe $1.25 million in 2019 for best execution violations.19
Investment accounts with Robinhood are covered by more than just the Securities Investor Protection Corp. (SIPC), which protects up to $500,000 for securities and cash or $250,000 for cash only per account. In fact, Robinhood also provides its brokerage customers with additional excess of SIPC coverage, which provides an aggregate of $100 million of coverage—up to $1.5 million for cash and $10 million for securities per customer, after the SIPC coverage is exhausted.14
Robinhood was primarily designed for new investors with a simple user interface and commission-free trades. However, more advanced investors will find that trades on the platform can be limiting: Trades tend to be routed based on payment for order flow (PFOF), there is limited research or resources available, and there are no customization options.
Robinhood’s security team encrypts sensitive details such as Social Security numbers, ensuring that they will be safe from hackers.12
Robinhood offers commission-free trades in stocks, exchange-traded funds (ETFs), options, and cryptocurrencies. A more in-depth fee schedule is listed on its website—for example, regarding regulatory trading fees.20
For a certain class of investors, Robinhood may be the right tool at the right time. However, for long-term investors, a mainstream broker may be a better alternative. In many cases, you can open a no-minimum account and get commission-free trades on many, if not most, ETFs while still having access to all the data, charts, tools, and educational resources you need to make informed decisions.
