Robinhood App Lets You Trade Stocks For Zero-Commission; Raised $3 million From Index And A16Z
Robinhood, a stock brokerage app, has raised $3 million seed funding from Index And A16Z. It is an app that lets you trade stocks for free. Until now, the brokerages have been charging $7 or $10 a trade. The money thus collected was used to pay the large number of employees and earn huge profits. It was initially launched for iOS to track stocks and sharing predictions. In October, it was approved by finance regulatory agency FINRA to become a broker-dealer.
But then, without charging any money how will Robinhood make money? “Robinhood will offer margin trading as well as API access. We also plan to offer premium services for active investors in the future. Robinhood is venture funded by Google, Andreessen Horowitz and many others, which affords us the freedom to focus on building a wonderful brokerage experience rather than short term profits” quotes Robinhood’s official website.
Vladimir Tenev and Baiju Bhatt, the co-founders of Robinhood, learned that the brokerages in the market pay negligible sum to place trades on the market. However they charged $7 to $10 a trade from the investors. Tenev and Bhatt brought this to their advantage and built a brokerage that doesn’t charge commissions or hidden fees. They did so with a ‘legacy technology, hundreds of storefront locations, and paper based accounting’.
Like E*Trade, Scottrade, and Ameritrade, Robinhood is a FINRA & SPIC registered brokerage dealer. Robinhood is currently for web and iOS only but android users can expect its services very soon.
Following are some eye-catching features of Robinhood:
- $0 commissions
- Protected and Insured
- Smart Notifications-get the information at the right time
- Fast Execution
- Real-time Market Data
Robinhood is offered on a first-come first-served basis. So hurry up and Sign in to access it.