There are many trading apps available online for investors, along with online brokerages and exchanges.
There are endless options to trade everything from ETFs (exchange-traded funds) to stocks, penny stock trading and even trade in cryptocurrencies.
One of the fastest-growing apps is the RobinHood app, which has grown tremendously since its launch in 2013.
It is a free trading app which is ideal for investors who want to trade options, stocks, exchange-traded funds as well as for cryptocurrencies, without paying any form of commission or fees.
However, there is a tradeoff for it being a free service.
Some features of the RobinHood app include:
Frequent stock, ETF and option trading
Individual taxable accounts
Provides a unique platform for mobile users
Useful for those who want to trade in cryptocurrencies
This point is pretty obvious.
Most people would be tempted to use this service because it is free.
The app gives a commitment to providing 100% commission-free stocks, options, ETFs and cryptocurrency trading which means there can be considerable savings for the investors who don’t want to pay additional cost in the form of fees or commissions.
This means every dollar that you save can be added to your returns.
The RobinHood app also provides a commitment to keeping other investor costs as low as possible.
To that end, they recently took a big step when they launched Clearing by RobinHood.
For example, broker-assisted phone trades, which were previously available for $15 could be free now, and the bank reversal charges can be reduced to $10 from $30.
The RobinHood app does not require any minimum account for the investors to keep, which means the investors can get started right away with whatever they have.
But you do need to have enough to purchase the stock you have your eyes on (there is a regulation by the Financial Industry Regulatory Authority that you need to know about which requires a minimum of $2,000 portfolio balance to open a margin account).
One of the best parts of the RobinHood app is that it is very user-friendly.
If you are used to smartphones, you would surely find the process of their sign up and account funding quite straightforward and simple.
According to the company, the users who are approved are informed in less than one hour, after which they can initiate their bank transfers.
There is a limit of $1,000 of bank transfers that are available instantly for investing, as well as proceeds worth $1,000 from the sale of stock.
Deposits more than this amount, however, may take at least 4-5 working days for processing.
The users may set up automatic deposits as per their need or convenience, which can be weekly, fortnightly, monthly, or even quarterly.
This service does not offer a large variety of options, but for investors who know what they want, this platform is more than enough for their needs to execute their trades quickly.
There is also a feature called "collections" available both on mobile and the web.
On the web, the collections can be sorted, and it allows the users to make a comparison of stocks side by side.
The RobinHood app has recently introduced a new tab bar at the bottom of the app which offers quick access to portfolio values, transaction history, watch lists, and account statements.
There are no bonds or mutual funds.
There are also no automatic dividend reinvestment options, which means that the dividends are credited to the accounts as cash, rather than having an option for reinvestment.
The company does plan to offer this in the future.
For the purpose of investment, RobinHood only supports individual taxable accounts, also known as brokerage accounts.
For many investors, investing through these accounts come only after they have invested at least 10-15% of their taxable income for retirement in a tax-advantaged account such as the IRA or 401(k).
One of the essential features lacking at RobinHood is that there is absolutely no phone support, and all customer support is done exclusively through email.
However, their online help center is quite helpful and useful and the website is also entirely transparent and easy to navigate.
Many people are suspicious when it comes to any online service that is free.
Quite often, there are hidden fees or costs that creep up into your accounts at a later date.
So, RobinHood can be a solid choice for you if you are ready to give up on notable research, advanced trading tools and a full range of investment options for limiting your costs.
If you are new to investing in penny stocks RobinHood is a great and free resource to utilize as an investor.