I must admit that at first I was sceptical about the new investing and trading app called Robinhood. It seemed to me like a first stab beta concept app built to address the millennial population that has been noticeably missing from participating in the stock market.
At first, I found the name was a bit odd… since Robin Hood was known for stealing from the rich to give to the poor. My second thought was that the app was visually underwhelming, a bit plain. Nothing to the UX, just a few nibblets of market information.
That is when the true magic of the app shines. I soon realized that you don’t need to have all the bells and whistles to make a good trade. The UX designers and engineers created a simple concept. What appears on the surface too simple actually is exactly all you need to see in order to make a trade. Too simple? Possibly, but I get it and it works!
Sweet trading platform
Platforms that are rich trading information accumulated from various sources, sometimes just don’t meet the needs of everyone. Robinhood instead decided to use the approach that you know where to find the information you need to make an informed decisions. The platform really shines by not charging any commission for placing the trade! I’m not sure how viable of a long term plan this may be… but I’ll take it for now.
So How Robinhood Makes Money?
What is the point of all this labor in creating a business if it’s not for profile? Well it seems like they have found the secret sauce of making money by not gouging the customer. The founders have made the business decisions to forgo the typical brokerage physical locations and any manual labor involved in making trades. This cuts down on all the extra “fat”. I still have a lingering question in my mind about the viability of this zero cost trading platform. There are some big time investors involved such as:
NEA, Index Ventures, Ribbit Capital, Vaizra Investments, Google Ventures, Andreessen Horowitz, Social Leverage, Box CEO Aaron Levie, Path CEO Dave Morin, Jared Leto, Snoop Dogg, Linkin Park, and Nas. So far as of today Robinhood has raised $66 million. Sure it sounds like a considerable amount, but in terms of long term cash stash, I’m not sure. Time will tell.
Simple design and excellent trading features
So far my trading experience has been really good. My initial investment has only been $100. There is no minimum and that makes for a great way to initialize the beginner trader into this world of investing.
I’ve made small one share purchases consisting of:
RDD, NAT, APLE, SBRA, NRG
Up so far with my portfolio value at $106.80. That is not a bad gain! Zero commision charges make it even sweeter!
One of the greatest features is the ability to connect to major bank accounts and transfer moneys quickly.
I’ll keep posting my results on Robinhood while my review and trading continue.