Some of you have asked me how did I start my portfolio and what I am using to trade my stocks.
While beginning my journey I looked into the common E-trade, TD Ameritrade and Fidelity and other well know trading apps and noticed the common theme of being required to have a minimum deposit and commission based trades that ranged (at the time) between $7-$10 per trade.
Upon digging deeper I came across Robinhood app which is commission free trading with no minimums. What does that exactly mean?
You can buy, sell and hold stocks with the money you deposit without any fees. How do they do it?
Robinhood is a stock brokerage that allows customers to buy and sell U.S. listed stocks and ETFs with $0 commission. We believe that everyone should have access to the financial markets and are on a mission to inspire a new generation of investors.
How are we able to offer commission-free trading while others charge up to $10 per trade? Robinhood was built from the ground up to be as efficient as possible. By cutting out the fat — hundreds of storefront locations, manual account management, expensive Super Bowl ads, etc. — we are able to maintain a lean bottom-line and pass the savings along to you, the customer.
Robinhood is an SEC registered broker-dealer and member of FINRA & SIPC. (The information below is based on company websites as of April 30, 2016.
There are limits though:
- You can not buy and sell stocks more than 3 times a day or you will be marked as a pattern day trader.
- After you reach your first $1000 you money will take 3-5 business days to access from a deposit or sell of a shares.
- The app is only accessible via your mobile app there is no online log in but there is a website to get more information.
- You have to use your bank account to access your funds - no credit cards / debit cards.
With a cash account, Robinhood requires customers to use settled funds (buying power) to purchase stock. The cash from a sale of stock will be received and credited to buying power on the settlement date.
Ex. You receive $100 from a sale of stock executed on Wednesday. The $100 from the sale will be available in your buying power on Monday.
Note: Banking and market holidays may delay settlement by one trading day. This means the proceeds from sales executed before a holiday may not be available in buying power after the typical settlement time frame.
And Lastly - PROTECTION
Robinhood uses state-of-the-art security measures when handling your information. Your sensitive personal information is fully encrypted and securely stored.
Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). Explanatory brochure available upon request or at www.sipc.org
Check the background of Robinhood on FINRA's BrokerCheck.
BONUS:
If you are interested in getting started with Robinhood they are offering a sign referral bonus where you and I get one free stock after your application is approved. The share of free stock are chosen randomly that can range from $2.50 through $200
1 in 60 chance of getting Facebook. Apple, or Microsoft
1 in 40 chance of getting Ford, Sprint, or GoPro
100% chance of a free share of stock
All you have to do is sign up with my link below and you'll automatically receive your share after Robinhood's approval.
http://share.robinhood.com/jeffr61
Have any questions feel free to leave a comment below!