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-   -   Adventures of RobinHood (building a financial bunker) (https://www.survivalistboards.com/showthread.php?t=894922)

Fermion 07-01-2018 10:41 AM

Adventures of RobinHood (building a financial bunker)
 
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I noticed in my E-trade account this year that I have paid $800 in commissions. Barf. I decided to test the waters with RobinHood, supposed to be some new commission free trading platform all the young kids are raving about. I was skeptical but figured what the hell...it is FDIC insured and if the trades take forever I can just cancel the account.

I funded it with $2500 using a link from forum member on a different board. That gave me a free share of stock (and they get one too). I figured might as well get something out this.

My free share turned out to be ZNGA, which isn't great (you have a chance to get something good, like Apple or Microsoft though).

The trading is much better than expected and does seem to be commission free. The execution of orders is FAST....faster than E-trade it seems. I even tried option trading and was able to do small orders closer to the bid/ask brackets than I had been able to do before (like if a Jan 2019 option was trading at bid $3.90, ask $4.05 I got a pretty quick (couple seconds) fill at $3.95 for 5 contracts.

I have raised my $2500 to $2670ish in the couple of days I have had the account. I am going to play with it and try to get it to $250,000 over a decade, if RobinHood stays around. I will post some updates occasionally.

If you want to give it a try, here is my invite link where we each get a free stock (please not ZNGA!):

https://share.robinhood.com/richare462


Here is a screenshot of my current portfolio. I am dipping into Geron, to try and do similar to what I did with Endocyte last year (bought $1.20, sold $14).

Anyway it is fun to play with.

PalmettoTree 07-01-2018 12:41 PM

If your commissions are greater than 1% of your account's worth you are just churning your portfolio. Obviously you are a trader not an investor. So does RobinHood give you the execution turnaround you need?

Hugh Glass 07-01-2018 01:07 PM

Grow $2,500 into $250,000? Do that and you will replace Graham, Buffets, et all a the greatest "investor" of all time!

Fermion 07-01-2018 03:29 PM

In 2001 I rolled a $1700 401K from a previous employer into a E-trade IRA.

Even with paying $9.95 per stock trade I have managed to increase that account to a current 2018 value of $93,400 with no further contributions.

So $2500 to $250,000 could be possible with free trades, as I am sure I have paid many thousands to E-trade over the past 17 years.

PalmettoTree 07-01-2018 03:42 PM

Quote:

Originally Posted by Fermion (Post 18902768)
In 2001 I rolled a $1700 401K from a previous employer into a E-trade IRA.

Even with paying $9.95 per stock trade I have managed to increase that account to a current 2018 value of $93,400 with no further contributions.

So $2500 to $250,000 could be possible with free trades, as I am sure I have paid many thousands to E-trade over the past 17 years.

Hats off, just be careful compare what you are giving up to save the $9.95. There are other online brokers with lower commission fees without going to RobinHood.

I am no expert of RobinHood. Just make sure you can do what you have been doing for less.

Fermion 07-03-2018 10:07 AM

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Light trading day today with market closing early and closed tomorrow.

Still, even with the limit on day trading I was able to increase the account a few dollars with some timely trades (on Merck June 2019 $60 calls)

The extra single share stocks Chesapeake and Groupon (gah I would never buy Groupon) are bonus gifts from signups using https://share.robinhood.com/richare462

I hope the other person got something a bit snazzier like Ford or Apple :)

Fermion 07-07-2018 12:58 AM

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Ended the (short) trading week with about a 13% overall gain in the account, which isn't shabby IMO. Annualized, that would be a yearly return of 45,000%

:) :) :)

Lono 07-07-2018 08:08 AM

Quote:

Originally Posted by Fermion (Post 18913900)
Ended the (short) trading week with about a 13% overall gain in the account, which isn't shabby IMO. Annualized, that would be a yearly return of 45,000%

:) :) :)

Approximately how many hours do you have invested so far working this new account?

When we had our place on the beach I had a next door neighbor that was actively day trading. I'd go to the beach, he had to sit in front of his laptop all day, even while eating. :taped:

Fermion 07-07-2018 09:24 AM

Quote:

Originally Posted by Lono (Post 18914206)
Approximately how many hours do you have invested so far working this new account?

When we had our place on the beach I had a next door neighbor that was actively day trading. I'd go to the beach, he had to sit in front of his laptop all day, even while eating. :taped:

If you don't count posting updates, probably about 2 hours total invested. I have only made around 8 trades and each takes just a couple minutes. I could trade on the beach if we had a beach.

So...$160/hr?

Fermion 07-10-2018 08:11 PM

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A few days later, a little update. I bought and sold Merck and Geron a few times. Got a couple of free stocks (thanks, hope you got something good too!

Increased the account to $2916, which is a $400 gain not counting the $16 in free stocks.

$400 gain in a couple of weeks on $2500 isn't horrible...that is a 16% return.

I am shooting for 60% a year which will actually give me $250,000 in 10 years...compounding rocks!)

Mule Skinner 07-10-2018 10:05 PM

I have an old buddy, now about 80, who has an apartment overlooking the beach in Florida.
He sits on the balcony with his computer and binoculars.
He plays Wall St on the computer for a while, then turns and watches girls on the beach with the binocs.
All day.

97guns 07-11-2018 03:26 AM

I’ve been using robinhood for a year or so, no issues what so ever

LoveLife 07-11-2018 04:33 AM

And now Robinhood is going to offer crypto currency trading...woohoo!

https://crypto.robinhood.com

97guns 07-11-2018 04:34 AM

I think crypto is already live with just a limited selection

Fermion 08-02-2018 11:45 AM

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Update:

A few trades back and forth on Merck and Geron and the account is at $3145

Backing out the couple free stocks and it is around a $620 gain since the thread started on a $2500 nut, or nearly 25% gain. To put it in a format understandable to all on here, that is about a half an ounce of gold gain :thumb::D:

To reach $250,000 I will need to make 60% gain per year for 10 years. It is just the beginning here but off to a good start. (Had I kept a bit more of the Merck I would already be at 60%)

NickTheGreat 08-02-2018 02:02 PM

What does Robinhood get out of this if they don't get a commission?

I haven't heard of this site until just now, so I'm going to explore a little bit.

spameggsbaconandspam 08-02-2018 02:42 PM

They make money off the spreads, interest on cash and margin. Nothing is ever free.

Fermion 08-03-2018 12:13 AM

Quote:

Originally Posted by spameggsbaconandspam (Post 18967076)
They make money off the spreads, interest on cash and margin. Nothing is ever free.

At first I thought this too but upon further examination, comparing the trade execution and bid/ask to my larger E-trade account, I am not sure exactly how they make money.

I have found that my trades on Robinhood execute equally as fast as my trades on E-trade (within seconds). If a stock is trading at a bid/ask of $41.90/$42.05 I have been able to grab shares on Robinhood for $41.95 while on E-trade sometimes my order will sit open at $41.95 and not fill for minutes.

Now it could be that E-trade is also making a lot of money off the spreads while still charging commissions too (they probably are) in which case it doesn't make sense to use them over Robinhood.

Except E-trade user interface is quite a bit better than Robinhood. Robinhood interface feels like 2 software guys working in a garage in India.

Still, totally free trading with fast execution at the price I want...go India!

Now how do I really think Robinhood is making money? I believe they are not making money. I think their goal is to grow their client base to such a point that they become annoying to E-trade and other bigger discount brokers such that they are bought out to remove them from the market. Etrade already did this with the deep discount broker OptionsHouse, which I used to use.

rriley 08-03-2018 07:40 AM

Quote:

Originally Posted by Fermion (Post 18968058)

I have found that my trades on Robinhood execute equally as fast as my trades on E-trade (within seconds).

Most small and moderate trades are matched by the exchanges matching engines so execution times and prices will appear to be the same no matter who your broker is.

With most orders, latency and colocation will be the variables in execution quality.

spameggsbaconandspam 08-03-2018 07:59 AM

Don't take my word for it?

https://www.fool.com/investing/2018/...ake-money.aspx


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