5 years ago, a magical app by the name of Robinhood was launched to the public. Of course, there are thousands of apps on the market, but what makes Robinhood unique is its ties to the stock market. Years ago, the brokerage industry was a completely different look. The thought of trading stocks on a mobile device would have been outrageous!
Enter Robinhood, the groundbreaking platform that gives consumers the gift of commission-free investing. Whether you’re an investing guru or you’re just dipping your toes in the Wall Street water, Robinhood is a unique app that is worth looking into. I’ve gone through and tested it out, so I’ve been able to get a good grasp of it. This guide will walk you through the Robinhood app so that you can get started trading.
First Things First: Who Can Use it?
As you know, Robinhood is an app that lives on your mobile device. It’s compatible with the iOS App, Apple Watch, and Android App. The app is free to download, and it’s free to create a profile. Anyone can use it! While it doesn’t require extensive knowledge about the brokerage biz, it helps to have a general understanding of where your money is going. With that said, Robinhood is fairly intuitive, and lots of people find it easier to learn about the stock industry when immersed on a platform like this. Recently, the app was made accessible on the web, so you can use Robinhood from your desktop if that’s your preference.
With a name like Robinhood, there has to be a story, right? This app won’t enable you to steal from the rich and give to the poor, but it does tie back to the Robinhood principle. The app puts a spin on it: Everyone should be able to invest, no matter what your background is. Because this app is commission-free, it gives everyone that chance.
The Robinhood story began at Stanford with classmates Baiju and Vlad. They were both well-versed in the financial industry, and upon graduation, they headed off to the Big Apple to take on the Wall Street world. They both noticed a pain point in the industry: Most Americans are paying $10 for every trade, but Wall Street pays barely anything to trade stocks. This realization inspired them to make a change. They wanted to disrupt the unaccessible financial market so that everyone could play a part in it. That’s what brought them to California, where they started Robinhood.
After you download the app, the next step is to sign up. The good news is the sign-up process is free and fairly easy. You’ll get started with your email and creating a password. Then, it needs some personal information from you. This is standard information that all brokerages must ask for.
- Legal name
- Phone number
- Email address
- Date of birth
- Residential address
Next, it’ll ask about your experience in the investment world, followed by a few questions regarding your employment status.
Linking Your Bank Account
Because Robinhood is handling your money, you need to link your bank account. No need to be scared of putting in this information—the app will safely store it. Pick your bank from the list and put in the information for your account number and routing number.
Once your bank account is linked and you’re ready to start making trades, the next step is to understand how to make a deposit. The app will bring you to a screen that allows you to add funds. When you make a deposit, you’ll reach a screen that asks how often you’d like to make the deposit. The options are: Just once, weekly, twice a month, monthly, and quarterly. That’s completely up to you! Some people love this feature of the app, and others like to stick to making their deposits manually.
Understanding the App
After you’re all set to go with Robinhood, take some time to play around with the app to understand it. The home screen is really intuitive. In the center, your total amount of money is displayed. This includes your cash (what you first deposited) and stocks. Right underneath that number is a smaller number with either a plus or minus sign next to it. This tells you how much you made or lost today.
Below the small number is a graph. Hopefully, it’s in an upward direction—that would be good news for you! This graph shows how much money you’ve made or lost over time. You can choose the timeframe in which it’s displayed. This graph is interactive, which is helpful for a mobile platform. When you really get into the trading business, every piece of data is useful for learning more about your investing practice. With this graph, you can press down on any given point to see the exact amount you had at that time. Pretty cool, right?
When it comes to searching for stocks, Robinhood makes that pretty simple for you. Click the magnifying glass and type the stock in the search bar. You can choose to keep an eye on that stock by pressing the + sign next to it. That way you can watch it and decide if you’d like to invest later on. You will also use the search feature for trading stocks.
If you click on the stock, it will take you to that stock’s individual page. On that page, you can see how much the stock is currently trading for and how much it is up or down for today. It’s a similar display to your home page but tailored to each individual company. Scroll down on the page and the app will show you the recent news about the stock. Even further down, you’ll see statistics, volatility, and then earnings. These features help you with understanding the trading business and staying updated on your stocks.
Buying a Share
There’s a button at the bottom of the screen yelling “Click me!” Just kidding, it says “Buy,” but it’s the same principle. This is the whole point of the app—to let you trade and buy as you wish. Once you click it, it takes you to the “Market Buy” page. On this page, you can see the amount in your portfolio, followed by a simple algorithm that allows you to decide how many shares you’d like to buy.
You’ll be able to input the amount of shares you’d like. Right below that number, Robinhood displays the market price, and then the app does the math for you in real-time so that you can see how much you owe if you buy a certain amount of shares. Once you look it over, hit the “Review” button to get a recap of everything before submitting.
The review page shows the math (again) so that you can confirm how many shares you’re buying for the current market price. It gives you a quick summary at the bottom, and right underneath that is a “Swipe up to submit” button. You guessed it—swipe up and you’ll seal the deal. It happens immediately unless it’s before or after market hours. In that case, Robinhood completes the deal as soon as the market opens.
What’s next? Confetti, of course! When you make a purchase, Robinhood congratulates you with confetti falling down the screen.
Selling Your Stocks
You may choose to dabble with some selling on Robinhood. It’s pretty similar to buying in terms of the interface and steps. First, you just need to get to the stock’s main page. Now that you own it, it will look a little different. At the bottom, it will now have two options: Buy and sell.
When you tap the “Sell” button, it takes you to a page very similar to the page you saw when you bought it. You will manually select how many shares you’d like to sell, the app will then do the math, and you can review it by selecting the “Review” button at the bottom. After reviewing and confirming, the only difference is that you won’t get any confetti this time. The confetti only comes up when you make a purchase!
Getting started with Robinhood is pretty simple. There’s no pressure to buy and sell a ton—you really can go at your own pace. All in all, it’s a great way to get your hands in the market, whether that means learning more about the stock industry or really trying to make a profit. Just refer back to this guide if you have any questions, and don’t forget to have fun with it.