There are many who make living out of trading stocks but we all know that making money in stock market is not so easy. Successful stock traders require plenty of discipline. Newer and casual investors like me always have the urge of playing with small amounts in stocks and see how they perform. Stock trading fees and commissions charged by online brokers for each trade always blocked my urge. Most online discount brokerage firms charge $10 on an average for each trade. For example if you plan to invest $1000 in a stock and you plan to use a discount broker that charges $10 per trade, 1% of your investment is charged as fee for buying the stock. Eventually when you decide to sell another 1% (or $10) is charged as a fee. Remember buying and selling same stock are considered as two different trades. In this example let's say there is no change is stock value since you first bought the stock. At the time of final sale you will have $980 in hand and $20 paid as trading fee. That is a $20 loss (or 2% loss). If you think about diversifying your first $1000 investment to just a handful of stocks you could easily be down 10% just from paying commissions & fees.
Robinhood came up with mobile-only brokerage application which lets you do unlimited trades for free, no minimum balance requirements with seemingly no catches. They have both Android and Apple iOS apps but there is no desktop or browser interface. I am using their app from past couple of months and I love their $0 commission trades and the user interface. The app supports general online brokerage features like market orders, limit orders, stop orders, good for a day orders, good till canceled orders etc. Of course heavy stock traders will find few features missing but this app is not targeted to them. Account opening process is as simple as submitting online application and linking bank details. In short Robinhood app will let you buy X number of shares of any NASDAQ listed company, then decide to sell down the line, and have no fees or commissions through out the process. I encourage readers to understand their FAQ page before opening an account and start trading.
Robinhood came up with mobile-only brokerage application which lets you do unlimited trades for free, no minimum balance requirements with seemingly no catches. They have both Android and Apple iOS apps but there is no desktop or browser interface. I am using their app from past couple of months and I love their $0 commission trades and the user interface. The app supports general online brokerage features like market orders, limit orders, stop orders, good for a day orders, good till canceled orders etc. Of course heavy stock traders will find few features missing but this app is not targeted to them. Account opening process is as simple as submitting online application and linking bank details. In short Robinhood app will let you buy X number of shares of any NASDAQ listed company, then decide to sell down the line, and have no fees or commissions through out the process. I encourage readers to understand their FAQ page before opening an account and start trading.
Happy and successful trading!
There’s no reason not to invest small amounts when fees are gone.
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