Posted byon June 17, 2014
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Since I have brokerage accounts scattered all around, I’m always on the lookout to find a company that will top our list of Best Online Discount Brokers.
Update: When you sign up for an account, you can now get a Free Share of Stock from Robinhood.
There’s a new broker rolling out free trading in an effort to build a lean business model that cuts out the overhead of other brokerages. Robinhood, a new technology-driven brokerage, is offering a slick trading app that will deliver free trades for “people like us.” I’m all for cutting expenses, so free trading sounds good to me!
Robinhood, who is backed by Google, explains their ability to offer free trades:
Building an automated, electronic brokerage from the ground up allows Robinhood to eliminate the costly touchpoints where other brokerages require human intervention or paper receipts. Rather than relying on primetime advertisements and costly brick-and-mortar storefronts, Robinhood maintains a lean bottom-line, allowing it to attract and retain customers far more cheaply.
Invites. Robinhood is controlling the number of new users. When I signed up for early access a month ago, I had 343,976 people in front of me.
Waiting List. Once you sign up for the waiting list, you can refer friends to move up your position in the line. Obviously, there’s no referral sign up bonus since their goal is to attract customers inexpensively.
Other Fees. The entire fee schedule is listed here: Robinhood Fees.
Asset Protection. Just like other online brokers, Robinhood securities are protected up to $500,000 through SIPC.
I’m looking forward to writing a full review of Robinhood once I get access to my account. Until then, I’ll keep checking on my spot in line! By the way, as I’ve waited patiently over the last 30 days, I’ve moved up to 28,349! If you are interested in estimating your spot in line, there are now 348,060 people behind me.