What is Robinhood
Robinhood is a CFD broker and startup in the financial and technological field from the USA. It consists of two main legal entities: Robinhood Crypto LLC and Robinhood Financial LLC.
The first one provides trading in stocks and options, and the second is intended for cryptocurrency trading.
How Does Robinhood Exchange Work
Robinhood gives its traders the opportunity to work with stocks, options, cryptocurrencies such as Bitcoin, Ethereum, Lightcoin, Bitcoin Cash and others.
You can also monitor the order and receive notifications by instant messengers or email. Information about the closure of an order or its movement in the order book will be automatically broadcast in notifications.
The broker does not have short trading positions since the company works with marketplaces, shorts are not supported. In addition, the service does not work with debt securities, mutual funds, and loans.
Zero commissions Robinhood can significantly save when trading US stocks. In addition, there are also no commissions for trading options and cryptocurrencies.
Automated strategies such as debit spreads, call, put, and straddle are available to traders. The minimum portfolio balance is $ 2,000, but there are no restrictions on the minimum account. This position is due to US legal regulation.
The company offers the withdrawal of earned money to deposit accounts of partner banks, the annual profit will be from 1.80%. You can also use the results of statistical studies of private laboratories and paid professional analytics. In addition to this, on the official robinhood.com website, almost all technical tools are paid.
The platform application works like smartphones with iOS and Android. The web version of the platform also works on computers and supports most modern browsers like Edge, Safari, Chrome, and Firefox. The broker cooperates with traders from most countries, except Iran, Syria, North Korea, and Cuba.
Is Robinhood Safe?
Robinhood Financial LLC is a member of the SIPC US Financial Regulators and Investor Protection Agency.
The second division, Robinhood Crypto LLC, is not a member of SIPC or FINRA. It means that cryptocurrency trading is not protected by any investor protection scheme. There is no banking support behind Robinhood, and this company itself is not represented on exchanges. Brokerage companies with a bank as the parent company are usually more stable.
Robinhood has very favorable commissions. You can trade American stocks without commissions, and withdrawal fees or lack of activity are also not charged. It has a good web interface and a mobile version for trading. The process of opening an account is quick and very simple.
However, Robinhood has a number of disadvantages. The services of this broker are available only to American and Australian clients. Customer support you can only by email, and this takes time. The product portfolio is mainly limited to the US market.
If you are attracted by the opportunity to trade US stocks without commissions and you want a convenient broker, then Robinhood is what you are looking for.