Robin Hood stock app ?

[marine65]

Has anyone tried this yet?
Its an app for your phone. You fund with what ever amount you want and buy stock shares. You can track your stocks, see your portfolio total.
My son funded it with $200 and bought some stocks. Some as low as .69 cents.
He bought 2 shares of an oil stock that 4 years ago was $6000 for $26.00 on a shot that it may zoom up again.
I down loaded it and am waiting for it to activate.
Looks like a fun way to play the market cheap. There are no fees.

 

[JHZR2]

69c? Is that per share, or per fraction of a share? How are dividends handled? Is the commission built into the sale price? Can you buy and sell exactly when you want?

 

[marine65]

Originally Posted By: JHZR2
69c? Is that per share, or per fraction of a share? How are dividends handled? Is the commission built into the sale price? Can you buy and sell exactly when you want?

Yes it was .69 a share.
There are no commissions.
They do not have every stock listed.
Go here https://www.robinhood.com

 

[Killer223]

i've made a nice bundle with this app. cummins stock is up from when i purchased. among others. it's been very good to me. not just the CMI stock.

 

[Dave Hess]

Originally Posted By: Killer223
i've made a nice bundle with this app. cummins stock is up from when i purchased. among others. it's been very good to me. not just the CMI stock.


How long have you been using this app ?

 

[69GTX]

How does this company make money if there no fees? Fwiw you can open accounts at ETrade and others and get hundreds of free trades when signing up. That's free too. If any brokerage goes belly up, you could lose a portion of your funds or all of it. It's not like it hasn't happened.

 

[marine65]

Originally Posted By: 69GTX
How does this company make money if there no fees? Fwiw you can open accounts at ETrade and others and get hundreds of free trades when signing up. That's free too. If any brokerage goes belly up, you could lose a portion of your funds or all of it. It's not like it hasn't happened.


There are no fees.
They make their money off the interest of not invested funds.
If you have $1000 in your account and have only spent $500 on stocks they collect interest on the other $500.
Multiply this by millions of members.
Two guys started this out of their garage, they just recently moved to a modest office.

 

[JHZR2]

I just looked, there is no DRIP.

I see two ways this could be interesting...

1) Sideline 10-20k in there to buy reasonable day-trade dip and momentum buys, assuming you can access LII and other info... Or just have it as sidelined cash to buy dips on stocks you know the charts and swings on.

Downside: there isn't real good trading data from the app, and apparently they require the trade to fully settle before you can re-access the cash. So not for day trading per se, but for opportunistic occasional trades.

2) To dump "pocket change" into stocks/ETFs now and again at low share counts without commission penalties.

Downside: with this process, upside is limited too, and since they don't offer a DRIP, you can't take advantage of the dividend compounding, which can be one of the more powerful profit making tools.

 

[raytseng]

I suppose this is a good learning tool for those getting into stocks and the market such as young people who are interested but lack capital to afford trades.

Once you reach a certain portfolio size, trading fees become inconsequential and other factors such as execution of your trades, flexibility or other factors become more important.

One big thing is their banking and access side is somewhat slim. If you need to move your portfolio in or out, you can't transfer assets, only money so you must cash out any positions before leaving which has tax implications
They don't have wire transfers so if you have a large account, you will lose on that transfer time of those assets.

 

[JHZR2]

Originally Posted By: raytseng
I suppose this is a good learning tool for those getting into stocks and the market such as young people who are interested but lack capital to afford trades.

Once you reach a certain portfolio size, trading fees become inconsequential and other factors such as execution of your trades, flexibility or other factors become more important.

One big thing is their banking and access side is somewhat slim. If you need to move your portfolio in or out, you can't transfer assets, only money so you must cash out any positions before leaving which has tax implications
They don't have wire transfers so if you have a large account, you will lose on that transfer time of those assets.


IMO your third paragraph contradicts your first two a bit. If they have sufficient capital to have real tax consequences, then the costs for commissions at a real broker will be inconsequential.

Honestly either this is distuptice on cost, and becones wildly successful at other brokerages' expense, or those of limited means will lose their shirts and never see enough practical gains to stick with it, and go join the uninformed mass that thinks trading stocks is "gambling".