Ok I am the residential Robinhood hater, but given the recent hacks I am just going to make an informational post in case people don’t have this information:
Robinhood made its living being a no commission brokerage and winning over smaller account traders. It had a genuinely very useful niche that made it a genuine trade off between the benefits of commission free trades and the drawbacks of using them.
for anyone who doesn’t know, Schwab, TD Ameritrade (which was just acquired by Schwab), Merrill edge, Fidelity, and many more brokerages are now offering Commission free trading. To me that pretty much eliminated the one advantage Robinhood has outside of cosmetic preferences.
robinhood has a litany of disadvantages though that can be portfolio and life changing.
a recent Bloomberg report had an internal source estimate that 2,000 accounts had been hacked:
Almost 2,000 Robinhood Markets accounts were compromised in a recent hacking spree that siphoned off customer funds, a sign that the attacks were more widespread than was previously known.
www.bloomberg.com
Now you might be saying, surely Robinhood will make these people whole, right?! Well based on that article and this article it seems like they’re taking the “wasnt our fault” approach to it. To be determined if they end up actually making them whole but based on these statements... eh
https://www.bloomberg.com/news/arti...oted-say-there-s-no-one-to-call?sref=B2JduoI5
Robinhood’s servers have performed pitifully this year at times when they were most needed (the most volatile trading days when people MOST wanted to access their accounts). You might be saying Moz, every brokerage has outages from time to time... and yeah, they do. But I have NEVER seen one span 2 days:
Robinhood's systems experienced "stress"—as did customers.
www.google.com
and this was not an isolated incident during the hugely volatile months. Robinhood had several outages
Robinhood also has been exploited, a lot, by people who really aren’t all that clever, to create infinite leverage scenarios and somehow they never have the systems in place to catch it:
this is not an isolated incident. Wallstreetbets has made a meme living exploiting their poorly controlled software. Will that necessarily affect you? Probably not, but it just kind of continues to drive home the point that it’s a budget brokerage and thats the experience they offer. The fact that a young buck who had next to no financial background was able to piece together an infinite leverage loop and not only did no one at Robinhood anticipate what really isn’t that clever of a scheme, but NO ONE caught what was going on until he lost a ton of money he never had
it’s a discount brokerage that performs like a discount brokerage in a time where the best in the business are offering the same commissions. Obviously if you prefer it have at it, but I wanted to make some of their issues as well as the prevelance of no commission trading known