Robinhood is the most popular investment application among amateur traders. Merchants who meet on online forums such as Reddit to raise or lower the shares of some companies while defying Wall Street hedge funds It’s on everyone’s lips after the GameStop case. The application takes its name and symbol (the pen) from the legendary English bandit who stole from the rich to give it to the poor. Let’s see how Robin Hood works and why he’s in the eye of the hurricane.Investing with robinhood, What is it, and how do I use it to invest?
What is the Robinhood app?
Robinhood is a free trading platform. It allows users to invest in a package of shares listed on Wall Street and buy and exchange cryptocurrencies. Investing in gold and ETFs, a type of investment fund, is also possible with this platform. All independently, without going through consultants. And all without spending a penny on commissions. Robinhood, in fact, benefits from advertising on the page and subscriptions to Gold Services.
In 2013, Stanford grads Baiju Bhatt and Vlad Tenev created the company to “democratize Wall Street” by allowing anyone to invest without commissions.
It is one of the most successful fintech startups in the world.
It’s not a new software, but its popularity has skyrocketed in recent months, and it aims to overthrow established powers and business methods.
Robinhood has often been blamed for “gamifying” the stock market. In fact, with its clean and cheerful interface and ease of use, the application has made entering the world of trading easy for anyone. Even for those who see everything as a kind of “worry-free pastime,” critics point out several elements of Robin Hood that seem to come out of a video game.
Users, for example, can “level up” and unlock new features or more risky transactions occasionally. There is also a similar approach to social networks’ relationship with their users. Registration notifications with emoticons and actions are reminiscent of Facebook and Twitter’s community engagement efforts.
How does Robinhood work?
We are all investors. This is one of the most popular slogans in the application. And its purpose is exactly this: to allow anyone to invest in the financial market, even without having large funds available, to play in the stock market. If no money was involved, it would almost look like a video game. The user creates a profile, chooses which packages to bet on, checks the market, and decides when to withdraw their investments or convert them into other actions. Investing with robinhood, What is it, and how do I use it to invest?
The more operations you do, the more you will level up. And the more levels you acquire, the more opportunities you will have to invest. Connect the bank account and start investing after creating the account and entering all the data.
The website lets you search for equities and check their price and movement up to five years ago. Purchases can be made in both shares and dollars. You can also set up recurring investments and price limits.Investing with robinhood, What is it, and how do I use it to invest?
All operations can be performed with a few taps on the screen. The Securities Investor Protection Corporation has certified Robinhood, and the Financial Industry Regulatory Authority (FINRA) oversees it. These certifications promise that the money will not be stolen during operations but not that the investments are safe. It is important to know that Robinhood is unavailable outside the United States. Only Americans with at least 18 years of age, a social security number, and U.S. citizenship can use Robinhood.
Is it safe to invest in Robinhood?
There has been a lot of talk about the application, and not just about the GameStop case. In 2020, a 20-year-old boy committed suicide after seeing a negative balance totaling about 730 thousand dollars in his investment app. The victim’s family chose to file a lawsuit against the platform. An issue that has opened a debate is whether to allow anyone. Financial markets, even those without the tools to understand them, can be accessed through
On the one hand, some accuse the platform of letting inexperienced people ‘play’ with a complex tool. On the other hand, some defend the application, claiming the freedom of the markets, which must be accessible even without intermediaries.However, it should be noted that deposits are guaranteed up to $500,000 for securities and up to $250,000 for cash, thanks to the Securities Investor Protection Corporation (SIPC). At the same time, the fact that FINRA regulates the platform makes it sufficiently secure.
Despite the protection of deposits, there is no real-time customer service available with this application, so if there is a problem, it may take some time to get in touch and deal with the situation. You are not protected against the loss in value of the shares during this period. In addition, Robinhood still requires users to invest in a global pool that, without a good understanding of the commercial market, is practically a bet.
Is it time to invest in Robinhood?
Robinhood is a fairly basic investment application. It’s better for modest investors who wish to make some extra cash and learn more about investing.
Existing investors searching for a powerful investment platform to test their expertise and push themselves may not want this. That said, it’s time for new investors to get their feet wet in the stock market.Investing with robinhood, What is it, and how do I use it to invest?