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Robinhood Gold: The Good, the Bad, and the Ugly


Is Robinhood Gold value it?

That’s a query solely you may reply for your self. So ensure you’re knowledgeable. No, I’m not an enormous fan of this dealer.

But additionally I do know Robinhood is a giant motive many newbies get into buying and selling.

When you’re one in all these new traders — I would like you to succeed. The rationale I educate is to point out merchants the right way to change into self-sufficient. I don’t have it in for Robinhood merchants. I simply have issues with the dealer…

When you’re nonetheless deciding on a dealer and questioning if Robinhood Gold is value it, this text would possibly assist.

I’ll offer you a Robinhood Gold overview and inform you what it’s best to count on from a dealer…

We’ll discuss Robinhood Gold’s advantages and shortfalls. Then you may make your thoughts up for your self.

Learn on…

What Is Robinhood Gold?

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Robinhood Gold is the dealer’s premium model.

Entry to the fundamental model of Robinhood is free. However its commission-free buying and selling is not a draw. Most different brokers now provide the identical deal.

So Robinhood Gold is the dealer’s try to present customers one thing extra.

For a month-to-month payment, Robinhood Gold allows you to commerce on margin. It provides you entry to Level 2 quotes which may be laggy and Morningstar evaluation.

Robinhood Gold additionally provides you better immediate deposit energy. Customers of the fee-free model can instantly commerce with as much as $1,000 deposits. Robinhood Gold ups this restrict to $50,000 … underneath some circumstances.

A couple of years again, Robinhood Gold’s buying and selling hours had been additionally an enchancment on the no-fee model. However since 2018, all Robinhood customers can commerce from 9 a.m. to six p.m. Japanese.

The dealer has a following. As of July, Robinhood has 22.5 million customers. Robinhood Gold is the dealer’s try to present its customers a reliable buying and selling platform. However its options aren’t distinctive to day trading platforms or different brokers.

How Does Robinhood Gold Work?

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Robinhood Gold has the identical minimalist interface as its free model. A whole lot of newbies begin buying and selling by way of Robinhood, so this characteristic is perhaps useful to them.

There are various Robinhood Gold threads on Reddit devoted to its performance. This is usually a good factor since a method to enhance your buying and selling is by speaking with different merchants.

When you have particular questions on the right way to use Robinhood Gold, the solutions are only a Google search away!

However Robinhood Gold reveals you an identical laggy real-time quotes you discover on the dealer’s fee-free model. This implies you’ll be buying and selling with worse data than better-equipped merchants.

Under its worth chart, you’ll see some primary stats on the inventory. Scroll down additional, you’ll see primary analyst scores. This is similar data you discover on the unpaid model … or any free buying and selling useful resource on the market.

Scroll additional, and you may see the total Morningstar report on the inventory. This feature is unique to Robinhood Gold.

Morningstar is a revered funding agency. Its evaluation is sober and conservative. Nevertheless it doesn’t give buying and selling ideas — it primarily covers a inventory’s long-term outlook.

One other characteristic unique to Robinhood Gold is its order e book. The service delivers Stage 2 quotes. Stage 2 quotes is usually a huge a part of your buying and selling technique. Check out my “Learn Level 2” DVD here. It’s six hours of Stage 2 technique. This knowledge may help you establish support and resistance in a inventory.

Nevertheless it’s much less useful for listed shares. Stage 2 methods work greatest on OTC stocks — which Robinhood doesn’t allow you to commerce.

How Is My Margin Curiosity Calculated?

One other draw of Robinhood Gold is its low margin interest rates.

With Robinhood Gold, you get $1,000 in interest-free margin. Every part above that’s calculated at 2.5% curiosity. That is low in comparison with different brokers, however it’s additionally not the total story.

When you short sell, you’ll need to pay borrow charges. These differ with the inventory. Some shares gained’t have shares to borrow. Others can be out there at excessive charges.

There are additionally FINRA-mandated fees. On smaller trades, these can be just some cents. However this all provides up and impacts your trading plan.

Margin buying and selling is usually a highly effective instrument. Or it may be a ticket to blowing up your account — quick. If you commerce on margin, you multiply your income … and losses.

My #1 rule is to cut losses quickly. That’s much more essential while you commerce on margin.

How A lot Is Robinhood Gold?

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The value of Robinhood Gold is $5 a month. There’s even a 30-day free trial.

Is Robinhood Gold value it? That’s as much as you.

Selecting a dealer is a private resolution. It is dependent upon your buying and selling strategy and preferences. I can’t inform you which dealer you’ll like greatest. You need to determine this out your self.

I will offer you some perspective, although. What you measure Robinhood Gold by shouldn’t be its price…

To me, one of many greatest components is the potential alternative price. When you’re solely utilizing Robinhood Gold and no different buying and selling platform, you may miss a lot.

That’s an issue as a result of skilled merchants have a lot better weapons.

The buying and selling platform I exploit is StocksToTrade.* It has all of the capabilities of Robinhood Gold — and far more! Right here’s a fast overview…

  • Clear and customizable charts. StocksToTrade charts even have extra choices than the 5 indicators supplied by Robinhood’s internet platform.
  • Dealer-designed inventory screeners. Lively merchants (together with me) designed StocksToTrade’s built-in inventory screeners. I don’t assume Robinhood Gold can evaluate in any respect right here.
  • A large-ranging information scanner. Robinhood’s information feed is just about what you’ll get on Google. StocksToTrade places Twitter mentions, SEC reviews, earnings, and extra alongside mainstream information tales.
  • Superior add-on companies. Need Stage 2 quotes? Alert companies? Chat rooms? StocksToTrade has them — and so they all may help you in your buying and selling day.

Grab your trial of StocksToTrade today — it’s only $7 for 14 days.

Does Robinhood Gold Give You Cash?

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Many beginner merchants on the market assume Robinhood Gold provides you cash…

No, Robinhood Gold doesn’t offer you cash. No dealer provides away cash.

Whether or not you be a part of Robinhood Gold or its free model, what it’s possible you’ll obtain is a inventory. That is just like different dealer promotions.

Your free inventory’s worth may be as much as $200. However verify the high quality print — 98% of customers obtain a inventory value lower than $10.

So what does Robinhood Gold get you?

Robinhood Gold advertises $1,000 in interest-free margin. However they’re not giving this away. It is a mortgage you need to use as leverage for a margin commerce…

If the commerce fails and also you don’t minimize losses rapidly, you’ll owe Robinhood cash.

I do know Robinhood seems like a online game to some. However you don’t get a number of lives. When you make dangerous margin trades, you’ll probably blow up FAST.

There’s just one case the place Robinhood Gold customers would possibly truly be given cash. Robinhood simply incurred the largest penalty FINRA has ever handed out. That is for the dealer’s March 2020 service outages and deceptive communications.

As a part of the penalty, Robinhood has to pay $13 million to customers harmed on this episode.

Robinhood Gold Benefits

When you use Robinhood however need an improve, Robinhood Gold has some benefits over the unpaid model. Relying in your perspective, there might even be benefits over different brokers.

Let’s break them down…

Its Margin Charges Are Low

When you’re used to different brokers’ margin charges, Robinhood Gold’s charges will come as a shock.

Most brokers begin their margin price calculations from the dealer name price. That is the fundamental rate of interest utilized in loans between banks.

Robinhood Gold doesn’t try this. The curiosity it expenses is half to one-third the speed of most different brokers.

You Can Brief Promote

This isn’t a bonus over different brokers. Shorting is a normal technique that almost all brokers permit.

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However shorting isn’t attainable with a free Robinhood account. You’ll be able to solely open a margin account with Robinhood Gold. And not using a margin account, you may’t brief promote.

It Has Higher Instruments

I don’t love Robinhood Gold’s Stage 2 quotes. However they’re higher than nothing.

The Morningstar funding reviews don’t do a lot for me both.

My buying and selling technique relies on information catalysts and technical analysis. Morningstar’s fundamental analysis is for a special sort of dealer.

Lively merchants like me focus extra on short-term trends. However this isn’t everybody’s strategy.

If these instruments be just right for you, that’s nice. Simply be trustworthy with your self. Meaning monitoring your trades in a trading journal. I’d additionally attempt brokers moreover Robinhood to seek out your greatest match.

Robinhood Gold Drawbacks

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OK, right here’s the dangerous information.

I don’t criticize Robinhood due to some private agenda. All brokers have their points. There’s no excellent dealer on the market.

However Robinhood has extra points than most. And sure, this even applies to the paid model.

You Can’t Commerce OTC Shares

That is my greatest problem with Robinhood.

Robinhood says it desires to democratize buying and selling. And sure, it has given thousands and thousands of younger merchants their first buying and selling experiences.

Its enterprise relies on catering to small-account merchants. It began the commission-free revolution, which is now an business commonplace.

And but they don’t have entry to OTC penny shares — the shares which have helped me make $7.2 million in my buying and selling profession thus far.**

I commerce these shares as a result of I feel they’re the easiest way to exponentially develop a small account. That’s why I begin every year with $12,000. I wish to present my Trading Challenge college students what’s attainable.

Many Robinhood merchants are interested in penny stocks. And but their dealer gained’t allow them to commerce a lot of the penny shares on the market.

That is my prime argument for staying away from Robinhood.

Learn more about these stocks in my FREE guide to penny stocks.

They Haven’t At all times Had the Greatest Executions

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Robinhood Gold works in ways in which aren’t all the time apparent however can impression your buying and selling…

FINRA and the SEC have investigated the dealer for failing to get one of the best executions. That is when a dealer doesn’t get one of the best worth attainable for its clients’ trades.

There are a number of the reason why this will occur. They get greater than different brokers for promoting their order flow and have frequent service outages. They’ve a primary buying and selling platform made for newbies.

Regardless of the case, Robinhood clients haven’t all the time gotten one of the best worth for his or her orders.

Their Quotes Are Laggy

In contrast with different buying and selling platforms, you’ll see a lag for Robinhood Gold. This lag isn’t big. All platforms have some lag and occasional service interruptions.

However in case you’re a day dealer like me, you understand that any delay will impression your trades.

The way to Open a Robinhood Account

When you’re nonetheless set on utilizing Robinhood Gold, their sign-up course of is simple. With the required minimal, they’ll routinely set you up with a margin account.

However in case you take one factor away from this text, it needs to be this: Select your dealer rigorously. You’re trusting them together with your cash.

Learn more on how to choose your broker.

Robinhood Gold: Often Requested Questions

Let’s go over among the most incessantly requested questions on Robinhood Gold…

Margin Isn’t for Me: Ought to I Nonetheless Use Robinhood Gold?

Margin buying and selling is among the greatest attracts for Robinhood Gold. However no, you don’t need to commerce on margin in case you go for a Gold account.

When Will Robinhood Be Obtainable Outdoors of the U.S.?

You should utilize Robinhood in most international locations. However you may solely commerce U.S.-listed shares.

Can I Have Greater than One Robinhood Account?

You’re solely allowed one Robinhood brokerage account. When you’re going to open a second account, perform a little research and think about making an attempt one with one other dealer.

Do I Personal the Shares I Purchase By means of Robinhood?

When you have non-margined lengthy positions by way of Robinhood, these shares are yours. You’ll be able to even switch shares to a different dealer for a $75 payment.

Conclusion: Is It Value Getting Robinhood Gold?

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Robinhood Gold has some followers on the market…

I’m not one in all them. However you’re the one one who can decide what works for you.

No matter your resolution, I wish to give you assist. Buying and selling is usually a fantastic life-style — When you don’t blow up your account with short-sighted methods.

Need to study the methods I’ve utilized in my 20-year buying and selling profession? Apply to my Trading Challenge.

It’s the place you may study from my expertise, course of, guidelines, and far more. Be aware that my staff and I don’t settle for everybody. I wish to work with solely essentially the most disciplined merchants. Severe about buying and selling? It is perhaps for you.

Do you assume I judged Robinhood Gold pretty? Which dealer do you utilize? Let me know within the feedback — I like listening to from my readers!

Disclaimers

*Tim Sykes has a minority possession stake in StocksToTrade.com.

**This degree of profitable buying and selling just isn’t typical and doesn’t mirror the expertise of nearly all of people utilizing the companies and merchandise supplied on this web site. From January 1, 2020, to December 31, 2020, typical customers of the services supplied by this web site reported incomes, on common, an estimated $49.91 in revenue.





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