Gambling closely ties into a fundamental human interest.
A legal gambling app is definitely hugely valuable.
I truly mean to say this in the most positive angle possible. I think they are providing a valuable service and a great app, but it is a very nice business as well due to the above.
I’ve yet to see any indication that people “gamble” (day trade) more when it’s free versus fee. Is this a fair criticism to level on Robinhood?
Besides, they have day-trading limits built into the app. It’s really just a mobile-first brokerage with extremely low net fees. And I’m grateful for it.
It was not aimed to be critical at all, just a comment on the attractiveness of the business.
Anecdotally, it definitely feels like it has broadened the base of the retail investor audience (which I think is a great thing) and if you have seen the options and crypto currency UIs it strikes similarities with fantasy football and makes those objects shinier.
> I’ve yet to see any indication that people “gamble” (day trade) more when it’s free versus fee.
I wouldn't say they "gamble" more because it's free, but because it's too damn easy on mobile. That's not a "good thing" from my point of view. People shouldn't be training themselves that they can manage their portfolio anytime/anywhere with a device they have on themselves 99.9999% of the time.
It simply encourages a person to be way more active with their portfolio than they should be.
Of course it has valid uses for some people, but most are just going to get themselves into trouble.
I'm not a Robinhood user, so correct me if I'm wrong. But as someone who's used ~5 different online brokerages, I'm having a hard time understanding what innovation they brought to the table. Buying/selling stocks online is already pretty damn simple, and takes 1-2 minutes tops. Where exactly is the innovation here? "We're going to undercut the competition and save users a couple clicks" is now a $5B business idea? Kudos to the founders, but this hardly seems like the stuff movies are made of.
IMO Interactive Brokers has a good mobile experience.
However, IB is decidedly not meant for the young, millennial, small amount of investment principal, getting started with investing/trading segment that Robinhood has carved out for itself.
So Robinhood's angle isn't just mobile first, it's mobile first for the segment of the population that expects such a product experience, who are going to grow their portfolios and trading activity in the coming decades.
Pretty scary that someone would be doing most mobile trading on a phone from a risk perspective. That's going to train people to basically turn into day traders.
Robinhood has multiple (perceived or real) advantages: there are no trading fees or minimums; you can trade equities, options, and cryto-currencies; the app's UI is simple and intuitive; etcetera. Robinhood is doing the most to make trading accessible to masses, and from what I've read online, they're quite successful at doing so. Robinhood is the defacto trading platform for the younger generation.
Etrade made 614 million in profit in 2017. 19% of revenue was from order commissions, or roughly 449 million. So Etrade could eliminate commissions and still remain profitable. https://en.wikipedia.org/wiki/E-Trade
No commissions on any stocks or ETFs. No commissions is huge when you want to create a diversified portfolio, buying only a few shares of each at a time. No other brokerage has even come close to trying to provide this. Robinhood earned a lot of brand reputation with this move.
UX. Try out a few other brokerage experiences, and then try Robinhood, and you’ll see that the market was ripe for the taking for a team with design sensibilities.
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[ 4.7 ms ] story [ 43.8 ms ] threadA legal gambling app is definitely hugely valuable.
I truly mean to say this in the most positive angle possible. I think they are providing a valuable service and a great app, but it is a very nice business as well due to the above.
Kudos to the team.
Besides, they have day-trading limits built into the app. It’s really just a mobile-first brokerage with extremely low net fees. And I’m grateful for it.
Anecdotally, it definitely feels like it has broadened the base of the retail investor audience (which I think is a great thing) and if you have seen the options and crypto currency UIs it strikes similarities with fantasy football and makes those objects shinier.
I wouldn't say they "gamble" more because it's free, but because it's too damn easy on mobile. That's not a "good thing" from my point of view. People shouldn't be training themselves that they can manage their portfolio anytime/anywhere with a device they have on themselves 99.9999% of the time.
It simply encourages a person to be way more active with their portfolio than they should be.
Of course it has valid uses for some people, but most are just going to get themselves into trouble.
However, IB is decidedly not meant for the young, millennial, small amount of investment principal, getting started with investing/trading segment that Robinhood has carved out for itself.
So Robinhood's angle isn't just mobile first, it's mobile first for the segment of the population that expects such a product experience, who are going to grow their portfolios and trading activity in the coming decades.
Etrade made 614 million in profit in 2017. 19% of revenue was from order commissions, or roughly 449 million. So Etrade could eliminate commissions and still remain profitable. https://en.wikipedia.org/wiki/E-Trade
UX. Try out a few other brokerage experiences, and then try Robinhood, and you’ll see that the market was ripe for the taking for a team with design sensibilities.
Their advantage is an ineffable quality.
The closest I can come to describing that feeling of using the service is it's like someone in your family made it for you.
This may sound strange, but there's a lot of love there. That level of attention to detail and quality is rare and apple-like.
[1] http://fortune.com/2015/03/12/robinhood-investing-app/