
Robinhood has lured young traders, sometimes with devastating results - prostoalex
https://www.nytimes.com/2020/07/08/technology/robinhood-risky-trading.html
======
cameronperot
The only thing Robinhood did good was pushing other brokerages to get rid of
commissions.

I would hope that most people left their platform after they had those major
outages during volatile trading days a few months ago. Any place that has
outages lasting that long without properly explaining what happened shouldn't
be licensed to deal in securities.

Now they're just preying on people that aren't knowledgeable in the financial
markets by showing them how "easy" it is to trade. I have studied and worked
in finance, and I'll be the first person to tell you, trading isn't the least
bit "easy" and shouldn't be portrayed as such.

~~~
basch
Robinhood is "easy" and mobile first. It wins because of UX.

A conversation I had with a person yesterday. Him: My older coworkers asked me
if I use all the new apps like Tik-Tok and Robinhood. Me: With everybody being
free now, theres no real reason to start with robinhood. Him: "But is it as
easy. If not, dont care."

My counterargument was customer service, but was not persuasive. He has no
intention of ever picking up a phone or asking for help. He wants a toy to
play with, while he and his friends cant be at the casino. The majority of his
money is at Vanguard, hes not moving it to robinhood. It's just something to
look at everyday for some entertainment value. Its the same mindset where "I
made x today (or at the casino)" but ignore the losses or how much they put
in. This is the same group of friends that are excited their $75 in dogecoin
is up 50% today, or who are playing with options against Draftkings for the
thrill of it. Gambling on gambling. Fun. Games. Thrill.

I can't say with a straight face that the Schwab or Fidelity have mobile apps
that are as simple to pick up or navigate. They involve more clicks, and
buried options. Free gave robinhood publicity and got people to give it a try.
UX keeps them around. If Schwab, Fidelity, Merril, Goldman Sachs/Marcus want
to compete in this space, they need lite versions of their platforms that are
true mobile first apps AND some kind of value add above Robinhood to lure
people to try it and convert. Maybe these arent the customers they are looking
for, some of them at least.

~~~
TedDoesntTalk
RobinHood is NOT free:

[https://www.wsj.com/articles/why-free-trading-on-
robinhood-i...](https://www.wsj.com/articles/why-free-trading-on-robinhood-
isnt-really-free-1541772001)

~~~
usmannk
I recommend ignoring this misinformed WSJ article and reading this:
[https://www.kalzumeus.com/2019/6/26/how-brokerages-make-
mone...](https://www.kalzumeus.com/2019/6/26/how-brokerages-make-money/)

After that come back and see how the WSJ article is just a poorly written hit
piece on RH.

~~~
KKKKkkkk1
> _After that come back and see how the WSJ article is just a poorly written
> hit piece on RH._

So I read Patrick's article and now I'm back. You're wrong.

Both articles are saying that Robinhood makes much more money from order flow
than other brokerages. The WSJ is saying that this is because Robinhood takes
the market makers' price improvements to itself instead of passing it on to
their clients. Patrick is saying that Robinhood makes more money off of order
flow because options trading (which Robinhood does a lot of) is much more
profitable for the market makers. Now both hypotheses might be true. Robinhood
could be offering their clients worse prices _and at the same time_ get paid
more by the market makers because of lots of options trading. I don't see
anything in Patrick's article that contradicts the WSJ's explanation.

And given the following quote, I think the WSJ's analysis is pretty
convincing:

 _One executive with a high-speed trading firm that executes orders for
Robinhood said its price improvement is much worse than that of competing
brokers._

------
andrewzah
So robinhood's crime was... making it easier to trade?

"After funding his account with $15,000 in credit card advances, he began
spending more time on the app."

"As he repeatedly lost money, Mr. Dobatse took out two $30,000 home equity
loans so he could buy and sell more speculative stocks and options, hoping to
pay off his debts. "

"with whom he has three children"

Nothing Robinhood (or anything else) has will cure financial stupidity.
Furthermore, anyone who -still- uses robinhood after their various crashes is
asking for trouble. I've had zero issues with TD Ameritrade.

~~~
Barrin92
It didn't just make it easier to trade, it systematically gamified trading
through UX design including confetti graphics when someone makes a trade. It's
basically using casino-like mechanisms to trick people into treating their
money like monopoly currency.

It's plain unethical and ridiculous that 20 year olds with no steady income
get access to highly leveraged financial instruments that can ruin them for
life.

~~~
res0nat0r
Should Las Vegas do a financial background check on someone before they are
allowed to enter a casino?

~~~
smt88
This analogy makes no sense. You can't lose more than you brought to Vegas.
When trading, you can.

Famous example:
[https://www.investopedia.com/articles/investing/121515/how-s...](https://www.investopedia.com/articles/investing/121515/how-
short-sellers-account-went-negative-106k.asp)

~~~
penagwin
Can you not gamble with a credit card in vegas?

It looks like the person in your example was selling a call, which has
potentially unlimited losses - that was a rather poor decision on his part.
There are much safer methods of making "the same bet".

Gambling is a random game designed to extract money from people. The stock
market is a math game that doesn't care if you gain or lose.

~~~
mBvpDszv
You can not directly use a credit card to gamble in Vegas. You can however get
a cash advance at the ATM or the Cashier's Cage for a fee, so indirectly yes.

------
Uptrenda
This article is written like grown-ass adult investors are babies who aren't
responsible for their actions and need to be protected from themselves...

>“They make it so easy for people that don’t know anything about stocks,” he
said. “Then you go there and you start to lose money.”

What a ridiculous appeal to emotion. "They" don't do anything. The guy made a
bunch of shitty trades and lost some money. It's no ones fault but his own. I
also think Robinhood tends to cop a disproportionate amount of crap for their
down time. Maintaining 100% uptime is very difficult to provide. Even with the
amazing code-as-infrastructure we have now its just not realistic to assume
there will never be downtime.

Their track record might not be perfect but if you compare it to the average
crypto exchange they are practically exemplary...

~~~
mrlala
>grown-ass adult investors

You really consider most early 20s to be grown-ass adults?

I sure don't.

~~~
kjksf
People can be immature at any age but this is not a discussion about that.

As a society we decided that there is an age at which you become an adult,
fully responsible for your actions.

At 16 you can start driving cars (aka very effective killing machines).

At 17 you can enlist in an army.

At 18 you can become a cop.

At 21 you can start drinking.

So yes, by definition of our society, at 20 years of age you're considered an
adult. At that point if you act stupid, don't expect sympathy.

~~~
mrlala
> at 20 years of age you're considered an adult

Just because you are legally considered an adult doesn't mean you are one.

First, do a quick google search on how long the brain keeps developing. Quick
excerpt
[https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2892678/](https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2892678/)

>Longitudinal neuroimaging studies demonstrate that the adolescent brain
continues to mature well into the 20s.

Second, do you remember when you were late teens/early 20s? Do you remember
how everyone was around you? I'm late 30s. I remember my early 20s while in
university and basically everyone around me. I was still a kid and so were
they.

Sure everyone develops differently but to act as if a 20 year old should have
the same sense as a 30 year old is stupid and you know it.

~~~
Jommi
You arguing completely besides the point. Yes the age when you are an "adult"
is completely arbitrary and a subjective opinion that differs with every
person.

However for a society to function we have seen the need to come together and
decide on some objective metric where you are allowed to perform certain
actions that have the potential to cause yourself harm if misused.

You giving your personal opinion that X years of age is not "adult" has no
real bearing in this discussion.

It would be more fruitful if you suggested some clear objective measure on how
to validate if someone is legible for trading options because this seems to be
an action were irresponsible acts can lead to huge demise.

People can drive cars at 16, potentially leading to loss of own life, and
others, if misused. Do you have an issue with that as well?

------
patrickm_
The line that stands out most to me concerns the driving force behind the
obsession with Robinhood - the confetti and emoji-filled notifications that
make it into a game.

It reminds me of the stories of children spending hundreds of dollars on apps
like "Clash of Clans" and "Smurfs' Village" only for their parents to find out
when they see the bill. Only now it's the parents that are getting taken
advantage of.

As social media and TikTok-like products shorten our attention spans and
continue providing instant gratification, it will become easier and easier to
take advantage of people. These aspects, coupled with making the user feel
smart (think "I'm a Wall Street trader"), and giving them the potential to
make lots of money, may start getting applied to other spaces and could have
drastic effects.

~~~
gkoberger
Well, is the counter true? That investing should feel like a corporate sludge,
overcomplicated to anyone who isn't lucky enough to have someone to show them
how?

Investing is scary for most people. I think a positive spin is that Robinhood
makes it so groups of people underrepresented in stock trading can
participate. The stock market already is a game, and it's being played by rich
people making themselves richer. Isn't it cool that a 22 year old with $100
can get involved, and it's not just old rich people who benefit from the
system?

The stock market is soaring, despite millions being out of work in the US. The
US has two different economies, and I'm all for anything that gives the latter
group the same tools the former group has.

~~~
dlp211
Investing has been simplified to the point that you buy a single low cost
target retirement fund and call it a day. You don't need to know more than
that. The next step is to of course replicate that target date portfolio using
the individual funds, thus reducing the expense ratio. Anything beyond that is
pure luck for the vast majority of investors.

~~~
asdff
Its not that simple, retirement funds are complicated and can be more
complicated if you work in different jobs/public or private sector, etc. Maybe
you can only put in a certain % of your paycheck. Maybe you can't touch the
money without a certain penalty. There are tons of complex rules compared to
essentially venmo with equities and crypto.

~~~
dlp211
Who said anything about using retirement accounts. I said use target date
mutual funds. You can buy the Vanguard 2055 TR in a normal brokerage account.
You can also get it in an IRA. I will admit that 401k and equivalent accounts
can be a pain because you don't get to pick the available funds, but that
wasn't the original issue being discussed.

------
gkoberger
What a crappy framing. From a publicly traded company that benefits from the
stock market, no less.

The stock market is soaring, despite millions being out of work in the US. The
US has two different economies, and I'm all for anything that gives the latter
group the same tools the former group has.

Why should only rich people who know how to navigate beige clunky 1990s
websites, or whose parents give them the number to their investment guy, be
the only ones who get to trade?

And the frustrating part of this article is that they aren't saying trading is
inherently risky, but rather that a certain group shouldn't be allowed to?
It's a cliche that stock traders were jumping out of windows in 1929, but
nobody said "we should shut down the stock market".

Everything can be overdone... gambling, sugar, video games. Why focus on the
few people who take it too far, rather than the millions who now have the same
access to wealth building that rich old people do?

~~~
TheCoelacanth
An index fund from Vanguard takes advantage of the market soaring just as well
as anything Robinhood provides.

Robinhood encourages active trading, which is almost always a bad bet for
small traders.

Robinhood also provides access to much riskier things like trading on margin.

~~~
kjksf
You can invest in Vanguard ETFs on Robinhood.

Except, you know, easier and faster than via vanguard.com

Literally every brokerage allows trading on margin because they all make more
money that way (via interest fees).

Banks flood people with credit card offers (instant, unsecured $10k loan) and
allow you to irresponsibly borrow against your mortgage.

How are those other companies any different than Robinhood?

------
keepshoutingsir
It's really not gamified. It doesn't "nudge" you. There are no dark UX
patterns that I've seen. They do not let you "go from training wheels to
driving motorcycles" any more than the actual American driving test does
(which, by the way, was less than three minutes long when I took it).

This whole article suggests one thing: Adults can't be trusted with their own
money. That's more than a little insulting, and while it's tragic that
gamblers have clearly used Robinhood as a substitute for other forms of their
addiction, it's no different to the many documentaries I've seen of people
doing the same thing at Poker tables or slot machines. It's just "bad" because
it's in an app.

Meanwhile, I've been very happy with the things I learned using Robinhood. Not
all of my investments have been successful. I've lost money on some. I've made
money on others. I'm not particularly interested in shorting, and I follow the
best advice: Don't invest what you can't afford to lose. Maybe they should
make that their slogan, since that's really all anyone can complain about.

~~~
hellomyguys
It definitely nudges you more than any other financial app.

You get push notifications for stocks making big moves up or down. They show
you popular lists which curates stocks in various ways (100 Most Popular,
Upcoming Earnings, Top Movers), which makes it find stocks you might want to
trade. They show you what analysts are staying about a stock (X% say Buy, Y%
say Sell). They integrate news articles and autoplaying playing videos with
finance news. The graph of you investing performance is animated the same as a
game's high score screen. They also give you a free stock when you sign up or
for inviting friends.

These are all mechanics pulled from social media and games to drive
engagement. Vanguard is definitely not doing any of these things. If I'm more
engaged with the app, I feel like I have a better understanding of the market.
If I have a better understanding of the market, I feel more confident day
trading.

At first glance its easy to view Robinhood as just a better UX for a finance
app, but it's clear they've gone beyond just making it easy to buy
stocks/options and are actively seeking to drive engagement.

This combined with the rise of things like r/WallStreetBets has definitely
inspired a new type of investor/trader.

~~~
kjksf
None of that is unique to Robinhood. All brokerage website provide you with
similar information, notifications about hot stocks etc.

Most of that stuff is something I want to know. I don't want to make blind
investments so research into stocks is a thing. And sentiment of others is
additional information that has effect on stock price, just like wall street's
analysts price target.

Really the only "sin" of Robinhood is that their app and website are fast and
well designed.

~~~
hellomyguys
All brokerage websites have auto-playing videos, give you a free stock (and
more for inviting friends?), and animated return charts?

------
bobblywobbles
I can't really read the whole article, but from what it sounds like is a man
put too much into the stock market, and lost. He took out even more to pay his
debts, and lost that too.

This has nothing to do with the app, but the risk tolerance of those involved.

~~~
tmpz22
The app makes it very easy (and promotes) leveraging beyond your means which
encourages subcultures like /r/wallstreetbets and influences young
professionals to dump irresponsible amounts of money into the app. Robinhood
100% knows about this and benefits from it, you can argue how complicit they
are but there is no doubting that they are in fact complicit.

~~~
asdff
Any broker can give you margin, robinhood does all the same things TD
ameritrade and everyone else does. A discussion about wall street bets is
another thing, but robinhood is not some unique platform in this regard.

------
muhammadusman
I'm in the typical customer base for Robinhood. I've been using their app
since late 2015 and I've never ran into issues like these. This is bound to
happen if you're treating trading like gambling and listening to strangers on
the internet about which stock to buy to get rich quickly.

Decades of historical data is helpful in figuring out that if you just spend
time in the market (with decent ETFs or stocks), you'll gain money. Timing the
market is way worse than just spending time in the market.

The examples cited in this article are people who are at the extremes and very
tragic but I hope it serves as a warning to other young investors that
Robinhood is not a game and the money is real, so tread lightly.

Disclaimer: I've put in around $10k into Robinhood and it's not my primary
savings/long term investment brokerage.

~~~
brewdad
Honest question: If you are using RH as a buy and hold investor and you have
other brokerages that you consider your primary savings, why are you using RH
at all?

------
Ansil849
> As he repeatedly lost money, Mr. Dobatse took out two $30,000 home equity
> loans so he could buy and sell more speculative stocks and options, hoping
> to pay off his debts.

One really can't make an armchair diagnosis based off one observation, but
this seems like a telltale sign of gambling addiction. The cycle of thinking
that to make up for losses you need to dig the hole just a bit deeper to
strike oil and float back out.

------
nickjj
The article sounds more like a story on gambling.

You could replace "trading stocks" with "playing poker" and it's basically the
same story. In other words, someone played way outside of their bankroll and
got crushed.

For example if you have $200 and want to get better at poker, you don't sit
down at a table and put $100 or $200 in chips. You'd likely want to sit down
where the maximum buy-in is maybe $2 or $5 so you can actually get experience
and ride a bunch of variance without losing everything immediately.

Sure, you won't be getting rich any time soon but if your goal is to improve,
you will slowly be able to move up as you get better.

When in doubt, follow the Rounders quote of "you can't lose what you don't put
in the middle".

~~~
tripletao
This is a bad analogy. Lower-limit poker tables attract lower-skilled players
for the reason you give, which means you're playing against lower-skilled
opponents[1]. In the stock market, you're always playing against the world's
top professionals and their computers. As in any game with a random element,
unskilled players still sometimes win, but on average they lose.

Investing isn't gambling, and Robinhood's conflation of the two is exactly the
reason to criticize them. It's very likely that a share of SPY will be worth
more in real terms thirty years from now than it is today, and that makes it a
useful vehicle to save for retirement. What it does in the next day, month,
year, or even decade is much harder to predict. By encouraging naive users to
trade frequently, Robinhood is encouraging users to expose themselves to that
short-term volatility, with no benefit except fulfillment of an urge to
gamble.

1\. Unless you're playing online against some guy with a bunch of fake
identities and a bot. Is that still a thing?

~~~
nickjj
> This is a bad analogy.

The analogy I was going for was this person took what sounds like his entire
savings and then took loaned money against his house and put it all into
trading super high variance options.

I'm not an experienced trader but I occasionally talk to some. They all say
options trading like that is a massive gamble. There's a big difference
between long term investing into an ETF and doing what this person did.

He could have chosen to put $500 into his account and hand picked some stocks
or ETFs and then watched it grow or shrink over time as he learns how to trade
but instead he chose to use 15k+ and then 2 big loans on high variance moves
to either hit it big or go bust in a very short time frame. It just happened
in this case he busted.

I think he would have had the same outcome on another platform if Robinhood
didn't exist.

~~~
tripletao
Hard to judge to what extent he was nudged by Robinhood's marketing and UI
towards risk-taking vs. initially predisposed. I agree that most other
brokerages allow--and often even encourage, just less effectively--their
customers to take similar risks. The difference is just that Robinhood seems
unusually good at the "encouraging", with UI frills like the confetti and
such, and their customers do anecdotally seem unusually prone to blowing up.

I'd re-emphasize my point as to your opponent's skill. Poker (or most other
games of combined chance and skill) gives you an opportunity to practice both
at lower stakes and against less skilled opponents. In the public markets, you
can risk as little as you want, but you're always playing against the world's
best counterparties, unless you can find some instrument that's both too small
to be worth the professionals' specific attention and too distinctive for
their existing algorithms to generalize.

------
deminature
>After funding his account with $15,000 in credit card advances, he began
spending more time on the app.

Isn't there some element of personal responsibility here? Is Robinhood
responsible for the disastrous financial decisions of an individual?

------
hashbig
It is the price of democracy. When voting was democratized it allowed people
with all different backgrounds and varying level of education to contribute to
the political body of a country. Same thing happened with the democratizing of
information with the arrival of the internet and search engines. It allowed
the flow and availability of information, all kinds of information, including
flat earth conspiracy theories, guides on how to perform violent acts ...etc.

One needs to look at the net sum. In my opinion, the net of the democratizing
of stock trading, like other forms of democracies was a positive.

~~~
balls187
I don't think the issue is democratizing stock trading.

The issue, as I understand it, it's that Robinhood's UX has crossed the line
from "easy, functional and usable" over to one that employs similar
psychological tactics that social media, casinos, and lootboxes employ to keep
users engaged with their product.

I'm not passing judgement on their implementation, instead likening it to
similar pleasure cycles that lead to addiction like behavior in the
aforementioned products above.

~~~
kjksf
Maybe we shouldn't be throwing words like "addiction" willy nilly.

Is it really your opinion that the guy wouldn't fund his investments via
credit card debt and then followed it up by borrowing $30k against his
mortgage if only he used ETrade and not Robinhod?

Somehow, I really don't think so.

~~~
balls187
> Is it really your opinion that the guy wouldn't fund his investments via
> credit card debt and then followed it up by borrowing $30k against his
> mortgage if only he used ETrade and not Robinhod?

Mechanically, ETrade does not allow you to fund your account via Credit Card.
You could request a check from your credit card company I guess...

But yes, most brokerage apps are focused on data, and less about engagement.

------
ericmcer
Wait the dude on the cover page went from 70k to 1 million then back to 140k
in a year? Why is that a sad story?

------
Waterluvian
I want to take $100 and go wild in this world of amateur investing, intending
to experiment until I’ve lost it all. My concern is that I might not
understand things and end up leveraging well past what I have injected into
the system.

Any good tutorials on “intro to investing” purely from an educational
perspective? But not just theory. Actual practical instructions.

~~~
javagram
Several brokerages offer a paper trading option so there’s no need to risk
real money or fear accidentally leveraging yourself. Just google paper
trading, I think thinkorswim has it along with others.

If using an actual account just don’t use options and don’t apply for margin
when you open the brokerage. It will be a cash only account and you won’t be
able to lose more than you put in (assuming we’re talking stocks and bonds
here, not Futures).

------
lmilcin
I have worked in a brokerage house on trading systems and currently in large
bank on risk calculations on complex financial products.

I cannot understate how important is that people first get to know what they
are dealing with when they start investing in anything. Whether you are
investing in housing, collectibles or exotic financial products you absolutely
have to understand how the thing works.

Everybody knows you need to pay close attention when you buy a house because a
small detail can make your entire investment a flop. Everybody knows to get
expert advice to estimate value of collectibles or spot fakes when you buy for
investment.

For some unknown to me reason people think the only thing they need to do is
to look at nice graphs and try to figure out if the line goes up or down
without actually understanding what the product is, how every single option
works exactly, and the in-depth situation of the product and its market
environment.

For you, people, who want to invest your money, please, do not invest in stuff
you do not understand.

Financial markets are very complex these days and it is unlikely you are going
to get valuable insight without treating it as your full time job and even
then it is pretty difficult.

You are competing with huge corporations employing thousands of bright
individuals trying to do the same but without risking their own money.

Your fallible mind will get you hooked because it is likely you will get some
early wins and it will likely cause you to stop being rational about your
market decisions. It is very difficult to be rational when significant portion
of your own capital is at stake.

------
cosmodisk
Robinhood enabled cheap buying/selling,which means deals are made more
frequently and that's what kills most newbies. Imagine looking at your screen
and seeing your Google shares going down by 20 points. People panick,they sell
only to say two days later that it went back up by 60 points.

~~~
thephyber
I suppose it's more of an indictment of trading stocks in the hands of a
newbie, but RH is customized for newbies (low cost trades, fractional
ownership, gamification) without (anecdotally) all some of the guard rails
that more mature brokerages have. Also, I've read that RH has/had "a bug" (as
described on Reddit) where an inexperienced trader could overleverage. I can't
see how this risk profile is profitable for RH, especially if they
specifically aim to have a large portion of the newbie trader market.

------
tinza123
Most people are not trained to trade options with pressing a button. Many
Robinhood users don't fully understand what the order they just placed mean,
just look at r/wallstreetbets. Robinhood is pushing alcohol to minors in a
sense.

~~~
asdff
Isn't everything? This is pushing alcohol to adults, mind you. Adults are
making these decisions. That being said, its not like TD ameritrade trains me
to trade options when I press the buy button on their cute mobile app.

------
ram_rar
Robinhood (RH) cannot cure stupidity. The only thing, they did was to kill all
brokerage fees to trade stocks. This has made it easy for value investors like
myself who occasionally trades stocks.

Having said that, I do believe there are lot of novice traders out there
trading options without really understanding what they are getting into. Also,
margin trading is another recipe for disaster if you dont know what you're
doing. But none of these can be directly attributed to RH.

My only major callout here is, they very easily got away for being down during
Market hours. For any brokerage, this should not be allowed without any
consequences.

------
fortran77
It's not like a paycheck loan product where you may get a desperate person
buying it as a "last resort". People have to make an effort to find out about
it, select a stock to buy, do some "research" even if it's reading bad advice
on subreddits.

So it's hard for me to have too much sympathy for people who have lost money
on this.

(I don't trade stocks very often. Every few months I rebalance things. This
has worked well for 35+ years. I'm 57 now.)

~~~
saalweachter
I think there are few things more harmful than the idea that you can get rich
fast.

------
1123581321
I know a few investors who think Robinhood is amazing. While they haven’t lost
the sums highlighted in the article, they trade often and tend to not realize
they lose money. I’ve noticed they tend to exaggerate movements in individual
stocks; my theory is the scale of the default stock chart views encourage
this.

They also don’t understand that Robinhood’s fractional shares and
cryptocurrency are a degree more abstracted than traditional online brokerages
and wallets.

~~~
cosmodisk
Sounds like target audience for Robinhood.

------
socrates1998
Literally the exact same thing happened when people were allowed to day trade
with better internet around 1998-2002. Everyone started day trading,
especially during the tech bubble right up to 9/11.

About 90% of retail traders lose money, so buyer beware. It's hard to trade
and beat the market.

Save most of your money and trade a small percent if you really enjoy it.

------
Munam
Shameless plug, but I've been working on the following site for a little
while:

[https://options.fyi/](https://options.fyi/)

 __STILL A WORK IN PROGRESS __

I wanted to hopefully arm people with some more knowledge about options before
they started trading, and to try to protect them from themselves.

------
peter303
Internet daytrading in the 1990s was an early version of Robinhood. You no
longer needed to place trades with a broker intermediary. Commissions dropped
from 3% to $8 a trade.

I know people who retired into daytrading, grad students who invested their
living stipends In daytrading. Things calmed down during the 2002 recession.

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sys_64738
You are ultimately responsible for your own actions so losing 15k$ is this
individual's fault. This is no different than buying on credit and thinking
you don't have to pay back what you buy. Or taking on student loans. Money
isn't free.

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asdff
The 15 year olds asking about options on reddit is so concerning. Imagine in 3
years when these kids start thinking about that 30k in student loans they were
just approved of.

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mtgp1000
This reads like a series of increasingly terrible decisions.

I don't have access to the full article but if they are laying the case for
having Robinhood regulated (as I suspect) then I'd say what's even more unfair
is preventing responsible people from having nice things because irresponsible
people can't be trusted not to hurt themselves, or understand the risks
they're taking.

Granted, that bit about gamefication does concern me, it's sort of dopamine
abuse - I'd argue to an extent it's a dark pattern, just like frequent
unsolicited attention grabbing notifications from other apps to encourage use.

~~~
ericmcer
It’s not really gamification, Robinhood just literally adds smiley faces next
to alerts like “:) your order to sell 20 contracts was completed.” I imagine
it is nearly identical to any other brokerages notifications but with an emoji
added.

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cowmix
What is the difference (pros and cons) of using Square to trade stocks over
Robinhood?

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m3kw9
For most, Robinhood is a casino

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nchase
Anyone have a link to the full article?

~~~
vageli
[https://web.archive.org/web/20200708175004/https://www.nytim...](https://web.archive.org/web/20200708175004/https://www.nytimes.com/2020/07/08/technology/robinhood-
risky-trading.html)

~~~
nchase
Perfect, thank you!

------
KKKKkkkk1
> _That growth has kept the money flowing in from venture capitalists. Sequoia
> Capital and New Enterprise Associates are among those that have poured $1.3
> billion into Robinhood. In May, the company received a fresh $280 million._

What does a trading app do with $1.5 bn? Isn't trading a commodity technology?

~~~
pathseeker
>Isn't trading a commodity technology?

The rapid consumption RH has of younger retail market seems to imply the
answer is firmly "no". The backend of sending orders to exchanges without
caring much about latency is surely simple, but the UI and UX clearly had
plenty of room for improvement.

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amiga_500
They are not "traders". They are kids speculating.

Leveraged exposure to the stock market and the obsession with leveraged
property are symptomatic of the fact that doing wealth creating jobs no longer
pays enough to lead a decent life.

It's given us Trump, it's also totally brought the UK to its knees.

The rentier culture of wealth appropriation over wealth creation has destroyed
the West.

------
Ghjklov
They never cover the success stories of small time traders who have been
enabled by Robinhood and such brokerages who require no minimums and no
commission fees.

To me, this just sounds like gatekeeping as usual. The boomer investors don't
like the young blood coming in and ruining their game, and realizing how much
money can be made by essentially shuffling money around on the stock market
while doing nothing concretely valuable to society.

