Difference between revisions of "Robinhood"

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Robinhood is a [[fintech]] company founded in 2013. Its primary product is an investment app that offers trading services for [http://www.marketswiki.com/wiki/Stock stocks], [http://www.marketswiki.com/wiki/Options options], [http://www.marketswiki.com/wiki/ETF ETFs], and [[cryptocurrency]].<ref>{{cite web|url=https://robinhood.com|name=Robinhood: Investing. Now for the rest of us.|org=Robinhood|date=September 7, 2018}}</ref><ref>{{cite web|url=https://crypto.robinhood.com/|name=DON'T SLEEP|org=Robinhood|date=September 7, 2018}}</ref>
  
Robinhood is an investment app that offers trading services for [http://www.marketswiki.com/wiki/Stock stocks], [http://www.marketswiki.com/wiki/Options options], [http://www.marketswiki.com/wiki/ETF ETFs], and [[cryptocurrency]].<ref>{{cite web|url=https://robinhood.com|name=Robinhood: Investing. Now for the rest of us.|org=Robinhood|date=September 7, 2018}}</ref><ref>{{cite web|url=https://crypto.robinhood.com/|name=DON'T SLEEP|org=Robinhood|date=September 7, 2018}}</ref>
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== Overview ==
  
== Overview ==
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Robinhood's investment platform is protected by the [http://www.marketswiki.com/wiki/SIPC SIPC], which insures its investors up to $500,000.<ref>{{cite web|url=https://robinhood.com|name=Robinhood: Investing. Now for the rest of us.|org=Robinhood|date=September 7, 2018}}</ref> It is also regulated by [[FINRA]] and is listed on FINRA's [https://brokercheck.finra.org/search/genericsearch/firmgrid BrokerCheck].<ref>{{cite web|url=https://brokercheck.finra.org/search/genericsearch/firmgrid|name=BrokerCheck: Robinhood Financial LLC|org=FINRA|date=September 7, 2018}}</ref>
  
Robinhood's investment platform is protected by the [http://www.marketswiki.com/wiki/SIPC SIPC], which insures its investors up to $500,000.<ref>{{cite web|url=https://robinhood.com|name=Robinhood: Investing. Now for the rest of us.|org=Robinhood|date=September 7, 2018}}</ref> It is also regulated by [[FINRA]], and is listed on FINRA's [https://brokercheck.finra.org/search/genericsearch/firmgrid BrokerCheck].<ref>{{cite web|url=https://brokercheck.finra.org/search/genericsearch/firmgrid|name=BrokerCheck: Robinhood Financial LLC|org=FINRA|date=September 7, 2018}}</ref>
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The app offers its trading services free of commission fees. In place of these fees, the company makes its revenue by selling premium services, selling [http://www.marketswiki.com/wiki/Order_flow order flow] to stock exchanges, and by charging interest on funds users keep in their Robinhood accounts.<ref>{{cite web|url=https://www.forbes.com/sites/sanjeevsardana/2018/08/13/this-investor-bet-on-robinhood-with-the-first-check/#3daf47875ff5|name=This Investor Bet On Robinhood With The First Check|org=Forbes|date=September 7, 2018}}</ref><ref>{{cite web|url=https://cointelegraph.com/news/robinhood-plans-to-launch-ipo-seeks-cfo-amid-audits-from-regulators|name=Robinhood Plans to Launch IPO, Seeks CFO Amid Audits From Regulators|org=Cointelegraph|date=September 7, 2018}}</ref>
  
The app offers its trading services free of commission fees. Instead it makes revenue selling premium services, selling [http://www.marketswiki.com/wiki/Order_flow order flow] to stock exchanges, and by charging interest on funds users keep in their Robinhood accounts.<ref>{{cite web|url=https://www.forbes.com/sites/sanjeevsardana/2018/08/13/this-investor-bet-on-robinhood-with-the-first-check/#3daf47875ff5|name=This Investor Bet On Robinhood With The First Check|org=Forbes|date=September 7, 2018}}</ref><ref>{{cite web|url=https://cointelegraph.com/news/robinhood-plans-to-launch-ipo-seeks-cfo-amid-audits-from-regulators|name=Robinhood Plans to Launch IPO, Seeks CFO Amid Audits From Regulators|org=Cointelegraph|date=September 7, 2018}}</ref>
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Robinhood partnered with Chicago-based trading firm Jump Trading LLC, which had already begun engaging in [[digital asset]] trading in November 2017. The partnership allowed Robinhood to offer free digital asset trading by sending digital asset trade orders to trading venues for execution. Nora Chan, a spokeswoman for Robinhood, said that Robinhood sends its orders to more than one trading venue - this could mean [[exchanges]], brokers, market-makers or OTC trading desks. She did not confirm that Robinhood uses Jump to execute trades, and a rep from Jump declined to comment on the matter.<ref>{{cite web|url=https://www.bloomberg.com/news/articles/2019-05-29/robinhood-s-free-crypto-trades-powered-by-chicago-s-jump-trading|name=Robinhood’s Free Crypto Trades Powered by Chicago’s Jump Trading|org=Bloomberg|date=May 30, 2019}}</ref>
  
 
Robinhood was designed for "the next generation" of traders. On its website, it encourages new traders to learn about trading using various tools integrated into the app's user interface, such as [http://www.marketswiki.com/wiki/Candlestick_chart candlestick charts], which were added in September 2018.<ref>{{cite web|url=https://robinhood.com|name=Robinhood: Investing. Now for the rest of us.|org=Robinhood|date=September 7, 2018}}</ref><ref>{{cite web|url=https://www.coindesk.com/robinhood-crypto-app-adds-candlestick-charts-due-to-popular-demand/|name=Robinhood Crypto App Adds Candlestick Charts Due to Popular Demand|org=Coindesk|date=September 7, 2018}}</ref>
 
Robinhood was designed for "the next generation" of traders. On its website, it encourages new traders to learn about trading using various tools integrated into the app's user interface, such as [http://www.marketswiki.com/wiki/Candlestick_chart candlestick charts], which were added in September 2018.<ref>{{cite web|url=https://robinhood.com|name=Robinhood: Investing. Now for the rest of us.|org=Robinhood|date=September 7, 2018}}</ref><ref>{{cite web|url=https://www.coindesk.com/robinhood-crypto-app-adds-candlestick-charts-due-to-popular-demand/|name=Robinhood Crypto App Adds Candlestick Charts Due to Popular Demand|org=Coindesk|date=September 7, 2018}}</ref>
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In December, Robinhood launched a new feature that allowed users to essentially hold a checking account through the platform. The company said these accounts would be insured by the [http://www.marketswiki.com/wiki/SIPC Securities Investor Protection Corp (SIPC)]. Stephen Harbeck, president and CEO of the SIPC, said in a Bloomberg interview that these accounts were not insured by the SIPC.<ref>{{cite web|url=https://www.bloomberg.com/news/articles/2018-12-14/sipc-says-it-has-serious-concerns-about-robinhood-s-new-product|name=SIPC Says It Has Serious Concerns About Robinhood's New Product|org=Bloomberg|date=December 17, 2018}}</ref>
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== Company History ==
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Robinhood announced the development of its app, including the promise of "zero-commission trading," in 2013.<ref>{{cite web|url=https://techcrunch.com/2013/12/18/zero-commission-stock-trading-robinhood/|name=Robinhood App Will Offer Zero-Commission Stock Trades Thanks To $3M Seed From Index And A16Z|org=TechCrunch|date=September 21, 2018}}</ref> The same year, Robinhood received approval from FINRA to operate as a broker-dealer.<ref>{{cite web|url=https://pando.com/2013/12/18/robinhood-gets-3m-to-take-from-wall-street-and-give-to-main-street-with-its-mobile-first-zero-commission-brokerage/|name=Robinhood gets $3M to take from Wall St. and give to Main St. with its mobile-first, zero-commission brokerage|org=Pando|date=September 21, 2018}}</ref> The company raised $3 million in seed funding from Index Ventures. The following year, the company raised an additional $13 million from investors; notable investors besides Index Ventures included Stockwits co-founder Howard Lindzon, Jared Leto, and Snoop Dogg.<ref>{{cite web|url=https://pando.com/2013/12/18/robinhood-gets-3m-to-take-from-wall-street-and-give-to-main-street-with-its-mobile-first-zero-commission-brokerage/|name=With $13 Million, Robinhood Aims to Share the Stock-Trade Wealth|org=Recode|date=September 21, 2018}}</ref>
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Robinhood's CEO, Baiju Bhatt, said at a public TechCrunch Disrupt SF talk on September 6, 2018 that the company had begun the processes of looking for a CFO to expand their business, as well as undergoing audits from the [[SEC]] and FINRA. Around the same time, the company announced plans to launch an [http://www.marketswiki.com/wiki/IPO IPO].
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In September 2018, Robinhood had over 5 million worldwide users.<ref>{{cite web|url=https://cointelegraph.com/news/robinhood-plans-to-launch-ipo-seeks-cfo-amid-audits-from-regulators|name=Robinhood Plans to Launch IPO, Seeks CFO Amid Audits From Regulators|org=Cointelegraph|date=September 21, 2018}}</ref>
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== New York Trading Licenses ==
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In January 2019, the New York State Department of Financial Services (DFS) gave Robinhood official approval to trade cryptocurrency. The DFS also gave Robinhood license to carry out money transfers.<ref>{{cite web|url=https://www.reuters.com/article/us-cryptocurrencies-robinhood/cryptocurrency-firm-robinhood-wins-new-york-trading-license-idUSKCN1PI2L4|name=Cryptocurrency firm Robinhood wins New York trading license|org=Reuters|date=January 25, 2019}}</ref><ref>{{cite web|url=https://www.thestar.com.my/business/business-news/2019/01/25/cryptocurrency-firm-robinhood-wins-new-york-trading-license/|name=Cryptocurrency firm Robinhood wins New York trading license|org=Star Online|date=January 25, 2019}}</ref>
  
 
== References ==
 
== References ==
 
<references />
 
<references />
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[[Category: mobile apps]]
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[[Category: regulation]]

Latest revision as of 10:00, 30 May 2019


Robinhood
Robinhood.png
Founded 2013
Headquarters Menlo Park, California
Key People Baiju Bhatt (Founder, CEO); Vlad Tenev (Co-founder)
Employees 200-500
Products Robinhood trading app
Twitter @robinhoodapp
LinkedIn Profile
Facebook robinhoodapp
Website Robinhood Home
Blog Robinhood Blog

Robinhood is a fintech company founded in 2013. Its primary product is an investment app that offers trading services for stocks, options, ETFs, and cryptocurrency.[1][2]

Overview

Robinhood's investment platform is protected by the SIPC, which insures its investors up to $500,000.[3] It is also regulated by FINRA and is listed on FINRA's BrokerCheck.[4]

The app offers its trading services free of commission fees. In place of these fees, the company makes its revenue by selling premium services, selling order flow to stock exchanges, and by charging interest on funds users keep in their Robinhood accounts.[5][6]

Robinhood partnered with Chicago-based trading firm Jump Trading LLC, which had already begun engaging in digital asset trading in November 2017. The partnership allowed Robinhood to offer free digital asset trading by sending digital asset trade orders to trading venues for execution. Nora Chan, a spokeswoman for Robinhood, said that Robinhood sends its orders to more than one trading venue - this could mean exchanges, brokers, market-makers or OTC trading desks. She did not confirm that Robinhood uses Jump to execute trades, and a rep from Jump declined to comment on the matter.[7]

Robinhood was designed for "the next generation" of traders. On its website, it encourages new traders to learn about trading using various tools integrated into the app's user interface, such as candlestick charts, which were added in September 2018.[8][9]

In December, Robinhood launched a new feature that allowed users to essentially hold a checking account through the platform. The company said these accounts would be insured by the Securities Investor Protection Corp (SIPC). Stephen Harbeck, president and CEO of the SIPC, said in a Bloomberg interview that these accounts were not insured by the SIPC.[10]

Company History

Robinhood announced the development of its app, including the promise of "zero-commission trading," in 2013.[11] The same year, Robinhood received approval from FINRA to operate as a broker-dealer.[12] The company raised $3 million in seed funding from Index Ventures. The following year, the company raised an additional $13 million from investors; notable investors besides Index Ventures included Stockwits co-founder Howard Lindzon, Jared Leto, and Snoop Dogg.[13]

Robinhood's CEO, Baiju Bhatt, said at a public TechCrunch Disrupt SF talk on September 6, 2018 that the company had begun the processes of looking for a CFO to expand their business, as well as undergoing audits from the SEC and FINRA. Around the same time, the company announced plans to launch an IPO.

In September 2018, Robinhood had over 5 million worldwide users.[14]

New York Trading Licenses

In January 2019, the New York State Department of Financial Services (DFS) gave Robinhood official approval to trade cryptocurrency. The DFS also gave Robinhood license to carry out money transfers.[15][16]

References