Robinhood Review 2019: My Honest Opinion + Signup Bonus

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Best Free Stock Trading App for US & Uk Citizens Free
  • Trade execution
  • Ease of Use
  • Fees & Pricing
4.7

Summary

Robinhood is the best free stock trading app for US & UK citizens. It's designed to make trading stocks, options & cryptocurrencies simple and easy. Learn why I use Robinhood on a daily basis and find out if it's right for you.

Robinhood pioneered the free stock trading movement and soon most major brokerages followed. I've been using the Robinhood app since May 2019 so here's my personal opinion on Robinhood.

In this review, I’m going to cover everything you need to know about Robinhood and show you how to open your account for free.

What is Robinhood?

Robinhood is a revolutionary commission-free stock, ETF and cryptocurrency trading app for investors who want to save money on trading fees and grow a substantial equity portfolio over time.

The company, headquartered in California, was founded in 2013 by Vladimir Tenev and Baiju Bhatt who were upset at the current broker options available to the average investor. Due to the app's massive success, Robinhood is planning an IPO in late 2019 as well.

Robinhood Founders
Founders of Robinhood App are Vladimir Tenev (left) and Baiju Bhatt (right). Photo Credit: Bizjournals

The app is used mostly by millennial investors who are new to investing and want to grow their portfolio over time. However, I think all investors can benefit from zero cost stock trades because that extra money saved on fees can be reinvested in your portfolio and will boost your overall return,

I’ve been using Robinhood app for over 1 month and will cover everything in-depth in this Robinhood App review. You can also follow my journey to a $100k Robinhood portfolio by checking out my Youtube videos and hitting the subscribe button

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Robinhood Benefits: Why Should You Use It?

I love many things about this app but here are the biggest benefits for new Robinhood investors:

  • Commission free trades (for both equites & cyptrocurrencies)
  • Extended hours trading
  • Zero minimum balances
  • No annual fees
  • Easy to use mobile app

The biggest benefit, in my opinion, is the commission free stock, ETF, REIT and cryptocurrency trades. Most full service brokerages charge a trading commission because they offer 24/7 customer support, have big offices and staff salaries to pay.

Robinhood doesn't have any 24/7 customer support or brick and mortar brokerage branches. The company is mostly based online, which allows them to keep overhead costs down and offer zero fee trades to their customers.

Opening a Robinhood Account

Robinhood app is a wonderful free stock trading app but it's only available to US citizens, US permanent residents or aliens with a valid US visa.

To apply for a Robinhood account, you will need the following:

  • Over 18 years of age
  • Have a valid Social security number
  • Have a legal US address

The signup process is simple and easy but before you sign up, use this link to get a free share of stock as a gift.

Fill out the application and link your checking account to make your first deposit into your Robinhood account.

Navigating the Mobile App & Website

I use the Robinhood mobile app everyday but they also have a desktop website.

Mobile App Design & Usability

The mobile app is lightweight (17.7 MB), well designed and easy to use. I enjoy browsing through dozens of stocks each day and I find it simple to research new stocks I never heard of using the Browse tool.

In the Browse section, you can review the “Top Movers”, popular collections of stocks, or even read headlines from major news sources like MarketWatch, CNBC, and Yahoo! Finance.

You can view your account balance, watchlist, holdings and notifications on the main page.

Robinhood Dashboard

On the second page, you can search for stocks by ticker symbol or classification. Robinhood organizes thousands of stocks into categories based on price, industry and popularity.

Desktop Website

The desktop website site is extremely bare and lacking. I rather use the desktop version but you can buy and sell from your laptop as well.

Range of Offerings

Robinhood only offers stocks, several ETFs, REITs, cryptocurrencies (bitcoin & others) and options trading. You cannot open an IRA, short stocks, buy mutual funds or bonds using the app. They lack a lot of full service brokerage features in order to offer free stock trades to their customers.

Stocks

Nasdaq, AMEX & NYSE stocks are available on Robinhood. That include both dividend paying & non-dividend stocks.

But how can I possibly navigate the thousands of stocks on Robinhood? There's a solution for that called Collections. Collections are like tags that group stocks based on their sector, IPO date, upcoming earnings, and price.

As of now, Robinhood doesn't do the best job of organizing stocks/ETF/REITs into smaller lists. For example, the Internet collection contains over 300 stocks!

Bonds

Bonds are offered on Robinhood as bond ETFs that track on major US exchanges. You can buy or sell these bond funds to diversify your portfolio allocation mix.

ETFs

There are lots of different ETFs on Robinhood that track major indexes. For example, SPY is a well known ETF which tracks the S & P 500.

REITs

Real Estate Investment trusts are publicly traded stocks that allow investors to invest their money into a pool of real estate properties and collect regular dividend payments. For example, Simon Property Group (SPQ) and Realty Income (O) are well know REITs.

Bitcoin

You can trade cyyptocurrencies 24.7 with Robinhood using their new Robinhood Crypto platform. First, you need to verify your ID to unlock your trading account.

Here's a list of available Cryotocureencies to buy and sell:

  • Bitcoin
  • Ethereum
  • Bitcoin Cash
  • Litecoin
  • Dogecoin
  • Ethereum Classic
  • Bitcoin SV

However, only US residences in the following states can trade cyptryo: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Idaho, Indiana, Illinois, Iowa, Kansas, Massachusetts, Michigan, Mississippi, Missouri, Montana, New Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, Washington, D.C., Wisconsin, and Wyoming.

Stock Options

Finally, options traders can rejoice! Robinhood offers free option trading using the 4 basic order types:

  • Buy Call
  • Sell Call
  • Buy Put
  • Sell Put

Simply click Trade -> Trade Options to view a symbol's options chain. Most equities have both near to expiration and long term contracts available.

Trading Experience

The trading experience is very smooth. Robinhood support both standard market hours (9:30AM to 4PM EST) and extended hours (9AM to 6PM EST) for equities while you can trade crytptocurrencies 24/7.

Placing a trade is very simple to do and I usually start off by clicking the search icon and typing in the name or company symbol.

From there, tap the floating TRADE button on your mobile device and select from Buy, Sell (if you already have shares) or trade options. Not every stock or ETFs is available for options trading. Be sure to check beforehand.

Order Types

Enter the number of shares and choose your order type from: Market, Limit, Stop Loss or Stop limit.

Market trades get executed immediately while limit trades are more safe if the stock is experiencing extreme volatility. Robinhood requires you to have at least a 5% premium on limit trades so you may have to deposit more money if you don't have the extra 5%.

Trade Execution

Once you enter your trade, you simply swipe up to place the trade. Your order status will either be queued or placed. Let's quickly define the differences:

  • Queued means the trade has not executed yet and you will have to wait until the order is placed
  • Placed means the order was successful and your account will reflect the changes.

Robinhood does a good job of trying to enter your trade at the lowest price and I've luckily bought several stocks at their 52 week low dips thanks to Robinhood.

You receive a mobile confirmation of your trade along with an email. If you want to turn off these notifications, go to Settings -> Notifications.

What is Robinhood Gold?

Robinhood Gold is the premium upgrade for select users who want access to increased benefits like:

  • In-depth Morningstar Research Reports
  • Bigger Instant Deposits
  • Access to Margin Investing

There are different pricing tiers depending on your account size and desired instant deposit limit:

Robinhood Gold Pricing Tiers

Pros

  • Excellent commission fee trading platform
  • Blazing fast mobile app that doesn't take up a lot of GB storage space
  • Automatic schedule deposits into your Robinhood account
  • Zero hidden fees
  • Connect your account with Mint & Personal Capital

Cons

  • No interest bearing money market account
  • No OTC stocks
  • Cannot setup a beneficiary in case of death
  • No 24/7 phone support
  • No retirement accounts available
  • Cannot automatically reinvest dividends (DRIP)
  • No forex trading
  • No short selling

Closing Thoughts

I think Robinhood is a fantastic product and except to see great things from the brokerage in the future. Of course, nothing is perfect and I have no plans of getting rid of my Fidelity account in the future.

It's the best overall app for commission free trading and I haven't had any serious issues with the app yet.

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FAQ

Do Robinhood offer fractional shares?

No. You cannot purchase fractional shares using Robinhood app. M1Finance and StashInvest are good alternatives for buying fractional shares.

Is Robinhood a brokerage?

Robinhood Financial is an SEC-registered broker-dealer.

Does Robinhood offer after hours trading?

Yes. Normal trading hours after from 9:30AM to 4PMEST but you can trade for an extra 2 hours after market close from 9am until 6pm Monday through Friday.

Is it easy to close your Robinhood account?

Yes. Simply contact customer service to either transfer your assets to another brokerage or sell all of your positions and withdrawal the cash to your bank account. Once completed. your account will be deleted.

What is Robinhood's business model? How do they make money?

They earn revenue from several different models including interest on cash deposits, rebates from order flow, and the Robinhood gold membership. Futher reading on how Robinhood makes money.

Does Robinhood pay dividends?

Yes. Dividends are credited to your account according to the pay date. However, Robinhood does not offer dividend reinvestment plans (aka DRIP) for investors. You can use the extra cash to buy more shares once you have enough. Here's more information on how Robinhood distributes dividends.

Does Robinhood charge expense ratios?

Yes. They charge expense ratios on ETFs and make money by sharing a cut of the fee with the fund company.

Does Robinhood offer mutual funds?

No. You can trade ETFs that track major mutual funds instead.

Does Robinhood offer short selling?

No.

Current Robinhood Promo: Get a Free Share of Stock

Robinhood Free Share of Stock

Robinhood is offering both you and me a free share of stock if you sign up under my referral link. Chances are you will receive a cheaper stock around $5 for but there is a 1 in 200 chance of receive a more valuable stock like Microsoft or Berkshire Hathaway.

Here's a list of all the free stocks I got for inviting friends to Robinhood:

  • 3 shares of GRPN
  • 1 share of INSYQ
  • 2 share of FIT
  • 1 share of SIRI

Special thanks to those of you who have already signed up: Benjamin J, John D, Antonio S, Randall H, Willie Lee J, Ernest H, and Vincent P.

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