Robinhood App Review: Trading and Stock Brokerage Company


Robinhood is a registered US stock brokerage company. It is also a member of FINRA and SIPC. Customers can buy and sell listed US stocks and ETFs; Robinhood doesn’t charge any commission for it. You might be surprised that how can it efficiently trade without any commission.

Actually Robinhood cuts a lot of human touch points, costly ads and manual account management and as such customers are at advantage at the backend. It works with the motive that everyone should get an access to the market investment and to motivate new generation of customers is its mission.

Robinhood is a great success and has raised $66 million from Google Ventures, Vazira Investments, Index Ventures, NEA, Social Leverage and many more to its credit. It makes money in the same way as other brokerage company do. It collects interest from the customers who upgrade their margin account. It receives money from the customers from interest on their un-invested cash balances.

Robinhood App

With a view to provide brokerage needs of the new generation, Robinhood has launched a powerful mobile app that allows traders to trade individual stock with $0 trade charge. The Robinhood app is available on App store for iPhone, iPad and Apple Watch. The app is also available for iOS devices running iOS 7 and above. You can also download the app from Google Play store for Android and works with 4.1 Jelly Bean and above.


To Set Up a Robinhood Account

To trade using Robinhood account, you need to have a Robinhood account. To get the account, you need an invite. Once you receive an invitation, you can set up an account. To get the invitation, you can sign up at its website or through an app. It has a very long waiting list, and you may not get the invitation immediately. The easiest way is you can visit Twitter and look for people who are giving away invite.

Eligibility for Robinhood account

  1. You must be a legal US resident.
  2. You must have a valid social security number.
  3. You must be of the age 18 or more.

Robinhood Account Sign Up

To open a Robinhood brokerage account, you have to submit an application to Robinhood. Your application will be reviewed by the company. Your details will be verified and if you satisfy the requirements, it will be approved immediately. About in an hour, you will be notified through email.

If some further verification is needed by a Robinhood representative, you will be sent an email from a customer service representative. In such cases, it may take up to five days for the approval.

To set up an account, you have to connect Robinhood to a bank account through which you can fund your brokerage account. You can put small initial amount to test. Bank transfer can be initiated only after your application is approved.

It takes about three days for your fund to appear in your Robinhood app. Once the money appears in your app, you can start trading. It is very easy to trade with this app and you get the power to earn fortune. To earn through trading, you need some research about stocks and where to invest your money. There are many tools offered to help you find it.

Questions during signup

You will be asked certain questions when you open a new account. Robinhood performs certain anti-money-laundering checks on new accounts in order to protect the U.S. markets and economy from known money launderers or some other criminal activities. As per the law, Robinhood has to send money market documents by mail.

It is mandatory for Robinhood to ask every new customer if he is employed, associated with any other securities firm, working as an executive position at a publicly traded company etc. This check is needed to safeguard the U.S. markets and economy from manipulation.

Your personal data is transmitted securely using SSL encryption. It never catches your bank login id, password, any tokens or even stores on our servers. Once the bank account linking process is done, Robinhood has no further access to a customer’s bank account.

Trading on Robinhood – Important Features

Not enough shares error: If you try to sell shares and if there is already a pending order for the share, you will get “Not enough shares” error. You ensure that such a pending order is cancelled before placing an order.

Buying power: Robinhood protects customers from volatile market and limits market buy orders collared 5% away from the inside market. You can see your buying power in your “Account Overview” option in your Robinhood app. Robinhood allows you to limit order to avoid a collar being charged if your total buying power is less than 5% of the total notional value of your trade.

Stock settlement: When you do the trade using Robinhood app, stock settlement takes place within three business days. When you sell stock, the settled fund from the sell will be credited to your account on the settlement date. Robinhood allows selling of stock immediately after purchasing.

No buy/sell button: You will not find buy/sell buttons on your Robinhood app in case of;

  1. If there is no balance in your account or if you have a negative account balance.
  2. Robinhood doesn’t allow trade if the security or stock you want to trade is domiciled in a foreign country as foreign domiciled trade might incur transaction fees. It protects its users from unexpected fees.
  3. Robinhood doesn’t support mutual funds, warrant, OTC security and option.

Pending orders: You will find orders “pending” until the orders are executed or cancelled. If you have placed orders when the market is closed, it remains pending until the market opens. Orders will also not be executed if the security moved is more than 5% from the price at closing.

Cancelling a pending order: To cancel a pending order, tap the Account icon in the upper left and hit ‘Order History’, tap the specific Pending Order you’d like to cancel, then select “Cancel Order” to cancel the order.

Small (~$0.02) fee after selling stock: You will be charged a small fee on sell orders by the US Securities and Exchange commission irrespective of the brokerage. Robinhood doesn’t take any share from this.

Day trading: Day trade is defined as the purchase and sale of the same security on the same trading day. If a customer makes four or more trades in five trading sliding window, he is a pattern trader. If the customer does the pattern trade with the margin account, then pattern trading rules applies. As per the rule, the customer needs to have an equity balance of at least $25,000 in a margin account. Such restrictions don’t apply for day trades in a cash account.

Order history: You can view your order history with the Robinhood app. There is an “Account” icon displayed on the upper left corner of the home screen of the app. You just tap it and you see the order history.

Order routing and exchanges:

Order routing: Robinhood routes its customers to Apex Clearing Corporation and through the route, it accesses all US equity exchanges. It doesn’t allow its customers to place orders directly targeting a specific trading venue. Execution: Robinhood doesn’t make any money on executing orders. It guarantees the National Best Bid and offer.

IPOs: As soon as any new company is listed on NYSE or NASDAQ, it is made available on Robinhood.

Average cost basis: With Robinhood, you can view your average cost basis for a stock on the stock screen below the chart. The average cost basis is calculated for buy orders only. It doesn’t reflect changes due to sells.

Tax lot order: It follows “First In, First Out” method for selling stocks. Your longest-held shares will be sold first when you sell a stock you own.

Robinhood Account Protection and Security: Robinhood uses cutting edge technology to protect your information and take security measures. Your private information is fully encrypted and stored in a much secured way. It is a member of the |Financial Industry Regulatory Authority (FINRA) and the Securities Investor Protection Corporation (SIPC), which provides protection to its members.

Fast Execution: With this app on your mobile, you can access your portfolio anytime from anywhere. Robinhood uses low-latency trading which is followed by many of the world’s largest financial institutions and as such its customers’ self directed orders gets the trade execution in a best possible way.

Real Time Market Data: Robinhood servers are built to work in real time and streams market data from exchanges without any time lag. It doesn’t charge customers for real time data and they get quotes for free in real time.

Smart Notifications: Robinhood sends notifications to its customers in advance of scheduled events such as earnings, dividends, splits etc. And as such you remain updated at the right time.

Robinhood Tax and Account Documents

You can view your tax and account documents with this app. To view it, you tap the “Account” icon displayed in the upper left of the Robinhood home screen. Then tap the “Documents” category. You will see all your documents. You will find your account number on your monthly account statement.

Your 1099 Tax Document will be available to you in the February month every year. Robinhood customers can import trade history easily while filing taxes using TurboTax Premier. When a prompt “Import from my bank or brokerage” is displayed, you just need to select Robinhood from the list provided. You will have to enter your account number which you will find on your account statement in the app.

Robinhood Withdrawal Restrictions

Robinhood is very concerned about anti-money laundering and risk management and for that customers’ must keep deposits in their account for a minimum of 5 business days after settlement. Funds can be withdrawn on the 6th business day.

Proceeds from a sale typically can be available for withdrawal after three days on security sales settlement.

Order Types Supported by Robinhood

It supports market orders, stop limit orders, limit orders and stop orders.


Market order – These orders are adjusted to limit orders collared at 5%. The orders will be executed at the next higher available price.

Limit order – Here you specify the maximum limit to amount you would like to pay for a stock. The order will be executed when the stock is offered at the limit price or lower than that.

Stop loss – With this order, it triggers a market order to buy when the stop price is reached or higher than that.

Stop limit order – There is a high risk associated with this type of order and stop limit orders will trigger a specified limit order when the stop price is reached.


Market order – With this order, the stock will be sold at the next best available price.

Limit order – Limit orders places the limit on the minimum amount you want to receive by selling a stock.

Stop Loss – It triggers a market order to sell when the stop price set can be achieved.

Stop limit order – Here a stop limit is placed and sell will be triggered when the stop price is reached. It limits the price at which your trade will execute. There is a risk associated with this order.

Robinhood Customer Support

If you want any support from Robinhood, you can write an email at [email protected] . You will get quick reply.

To know further about Robinhood, you can refer to their FAQ at .

If you are interested in stock trading, you don’t need to pay any commission to the brokerage companies. You just download Robinhood app on your mobile device and trade for free. It is very easy to work with and offers very protected and secured method. So, just download the app and make money with Robinhood. Read more articles on activateenter.

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