Robinhood brokerage day trading rules, active trader platform, margin account requirements, buying power limits, calls, fees and $25,000 minimum equity balance SEC/FINRA restrictions.

Day Trading on Robinhood

If you’ve been paying commissions on every single one of your day or swing trades, maybe it’s time to consider a $0 broker. Robinhood, for example, charges nothing for an unlimited number of trades. Let’s see how it performs for short-term trading.

Range of Offerings

Robinhood clients can buy and sell stocks (including some OTC and penny stocks), ETF’s, closed-end funds, cryptocurrencies, and option contracts.

Commissions

As already mentioned, Robinhood charges nothing for trades of any securities offered at the firm. There are no per-contract option commissions. In fact, there are even no assignment or exercise fees.

Trading Experience

Robinhood doesn’t have a desktop platform, which is the first major weakness for day and swing trading. It does offer a decent website with a browser platform. There is no trade bar.


Robin Hood Day Trading Review


The platform offers full-screen charting (just click the ‘Expand’ link underneath the small graph on a security’s profile page). Charting offers timeframes of 1 day, 1 week, 1 month, 3 month, 1 year, and 5 year. There are only two display styles on a large graph: line and candlestick. Unfortunately, the interval of a candlestick cannot be changed. On a 1-day chart, a candlestick has an interval of about 3 minutes.

Besides the lack of interval choices, another problem for day and swing traders on Robinhood’s platform is the lack of technical studies. There are just 4 of them: moving average, exponential moving average, MACD, and relative strength index. Volume can be added to a chart.

Day trading options is pretty straightforward. There are no traditional chains on the Robinhood site. Instead, the software uses buy and sell buttons combined with call and put buttons. We found this setup to be quick and easy. Only four legs can be added to a derivative order.

Breaking news articles are linked to a stock’s profile page at Robinhood. We found pieces from Reuters and CNBC. Some articles we found had been posted less than 60 minutes ago.

Robinhood doesn’t provide a regular stock screener, but it does offer tags with select categories. For example, health and entertainment are two tags. Clicking on one produces a list of stocks in that category, and the results can be sorted by analyst ratings, popularity, the day’s price change, and price change over multiple frames.

Trading cryptocurrencies follows the same pattern as for stocks, options, and funds. One notable difference is that crypto graphs offer tick-by-tick price history. Just click on ‘LIVE’ next to 1-day. The price action will automatically scroll.

The disadvantage here is that the trading ticket isn’t available on the full-screen chart. The solution is to go back to the smaller chart, but candlesticks aren’t available. Live price action (in line mode) is available for cryptocurrencies on the smaller graph.


Robin Hood Active Trading


Mobile App

Robinhood has a mobile app, where day and swing trades can be placed. The same order form is there, and charting is similar. Of course, charting and order entry cannot be done on the same screen.

Comparison

The first strength Robinhood has against other zero-commission brokers like WeBull and M1 Finance is the offering of option contracts. And Robinhood is the only zero-dollar broker to offer cryptocurrencies. In fact, it is the only securities broker we know of (free or otherwise) to offer trading in 7 cryptos.

Firstrade is a $0 commission broker that offers not only options, but very good option tools that are missing at Robinhood. But Firstrade has assignment and exercise fees, which Robinhood doesn’t have.

CenterPoint Securities offers a lot better technology than Robinhood for just a little more in commissions. The brokerage firm charges 0.2 cents to 0.65 cents per share for trades. Regulatory, exchange, and routing fees are passed onto the trader. Routing fees can be positive or negative, meaning that it’s possible to get rebates. Obviously, direct-access routing is available; something that’s absent at Robinhood. Same goes for Level II quotes.

There are different commission plans available at CenterPoint, depending on your expected trading volume. There is a $0.95 minimum commission. There are software fees, but it’s possible to have them refunded by meeting trading minimums.

Robinhood Day Trading Judgment

Robinhood offers just the bare minimum in software; so we can only recommend it for shoestring day trading.


Firstrade


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