Robinhood $0 Commissions – Stop Paying up to $10 Per Trade
Commission-free trading is like music to every traders ears, especially if they are a highly active day or swing trader. When you’re making 5 trades a week, or maybe even 5 trades a day, commissions can quickly eat into profits. If you’re new to trading you may not know this, but commissions are charged not only when you purchase shares, but again when you sell them as well. So if your broker charges $10 per trade, that’s $10 when you enter your position, and another $10 when you sell your position ($20 total). If you’re making 5 trades a day, you’ll be paying $500 in commissions per week. Some people don’t even make that much working a full-time job!
The Markets Should Be Accessible to Everyone
Robinhood started with the notion that the markets should be accessible to everyone. No commissions. No minimum deposits. No roadblocks to getting started. In today’s technology-driven world, they have cut out the fat that makes other brokerages costly: storefront locations, manual account management, advertisements, and overhead.
Zero-dollar ($0) commissions are available for self-directed individual cash or margin brokerage accounts that trade U.S. listed securities via mobile devices.
Bank transfers (ACH) are free as well. Robinhood is currently available for the iPhone, iPod Touch, iPad, and they are currently Developing Android Versions. To apply for an account, you must be a legal U.S. resident, have a valid social security number, and be 18 years or older.
Without Commissions, How Does Robinhood Make Money?
Believe it or not, Robinhood makes money in a similar way to traditional brokerage firms. They accrue interest off of customers’ cash balances. They will also collect interest from customers who upgrade to a margin account (margin accounts aren’t yet available). In short, using margin is when an investor borrows money to leverage their trade, and when they borrow that money, they will have to pay interest on it later.
Keep in mind that Robinhood can keep costs way down without the recurring fees that come with physical locations and an extensive workforce. The self-directed, mobile-based approach allows you to trade 100% free.
How Does Robinhood Compare to Other Online Brokerages?
In terms of the cost, there’s really no competition. In my example above, I mentioned a day trader who might pay a $10 commission per trade and make 5 trades per day on average (perfectly reasonable for a day trader). This comes out to total commission fees of $100 per day, $500 per week, and $26,000 per year – That’s no small chunk of change. Imagine the things you could do with savings of $26,000 per year!
There’s also no minimum deposit, so if you’re new to the market you can take things in stride and go at your own pace. You can deposit $10, $100, $1,000, or even $100,000. The choice is yours. Another underrated benefit is that there is no penny stock surcharge. For example, many brokerages will charge an added commission when you buy & sell stocks under a certain price per share (It varies but $2 is the usual cutoff). This surcharge can make it nearly impossible for you to profit on your trades.
Conclusion: Join the Stock Trading Revolution
Frankly, paying commissions for buying and selling stocks is a little outdated. What are you even paying for? I’ve personally never stepped foot in a physical brokerage firm or called in for them to manually execute my trades. There’s no person-to-person contact that warrants a charge! You simply make all of your own trades on the mobile platform and Robinhood makes money off the interest from uninvested cash. Everybody wins.
This is the future of trading and you don’t want to miss out. Stop paying thousands of dollars in commissions and be able focus on pure profits. It never hurts to have an advantage on Wall Street!
Will you be at the forefront of stock trading? Please leave any questions & comments related to Robinhood below!
Written by Matthew Thomas
*ANNOUNCEMENT*: New Stock Trading Content From Matt Thomas Has Migrated Over to EliteSwingTrading.com. Related Articles at EliteSwingTrading: