Robinhood Paper Trading

Robinhood does not provide paper trading, simulated or practice account. For a free virtual trading get Webull practice account or learn more about WeBull paper trading.

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What is Robinhood Investing?

Robinhood is a relatively new app-based broker that has arguably pioneered the growing popularity of commission-free trading. Because of its focus on the app being the center of their account platform and its free trading, it has resonated especially well with millennials, who make up its largest user base. This article will offer all the details about Robinhood that a beginner would be looking for.

Account Opening Process

First things first, opening your Robinhood account is a simple and quick process – we’re talking 10 minutes or so. All you will need to open an account are your personal details (i.e. name, address, phone, etc.), social security number, and an active checking or savings account to link to and fund your Robinhood account. For a step by step overview of the account opening process, we recommend you read our separate article, specifically on this topic. Once you’ve opened your account, funding it via ACH transfer is free and easy.

Robin Hood

What You Can Trade

Robinhood’s trading platform currently only supports U.S.-listed stocks (excluding most penny stocks) and ETFs, ADRs, options, and major crypto-currencies. Mutual funds, bonds, and futures are off-limits, but we wouldn’t be surprised if these are added to the platform with time. Robinhood’s selection of investments is okay, but compares unfavorably to competitors with $0 commissions, such as Firstrade.

Navigating the App

One might describe Robinhood’s app as bare-bones because it’s pretty basic and doesn’t offer a lot of the tools and features (i.e. stock screeners and advanced charting) you find with other brokers, like Firstrade. This could be viewed as a blessing in disguise for beginners because its lack of “bells and whistles” makes Robinhood’s app less-cluttered and easier to find your way around in. And although a lot of those extra tools and features are nice to have, they are generally more useful after you’ve already mastered the basics of investing.

The Main Screen

The app’s main screen (below) will show you a snapshot of your account, including your account value, gain/loss, and personal performance over time. Below this is a newsfeed of relevant market highlights and headlines from the companies you’ve either invested in or added to your custom watch list. By clicking on the person icon in the lower right corner of this screen, you will be taken to a complete account menu, where you can access trade history, account and tax statements, transfers, and a help section. That covers ~90% of the app already, and the only key piece left is placing trades, which we’ll cover next.

Placing a Trade

Placing a trade on Robinhood’s app is easy. If the stock is already in your watch list, just click on it, and if it’s not just search for it via the magnifying glass icon in the bottom center of the screen. This will pull up that stock’s summary page. By clicking on the “Trade” button, you can then choose whether or not you want to buy or sell that stock or its options contracts.

In the below screenshot, we are entering a market order to buy 100 shares of the ETF “IEMG”. It tells us the ETF’s last price was $52.43 and our estimated cost will therefore be $5,243. The actual cost could be a bit different when the trade is actually submitted and executed if the ETF’s price moves at all from $52.43, but it shouldn’t have moved too much. If we change the order type to “limit order”, we can specify the maximum price we’re willing to pay and therefore know with certainty that our trade cost will not surpass this specified amount (but there’s no guarantee a limit order will get executed).

Robin Hood Limit Order

What Are the Costs and Fees?

As we mentioned earlier, Robinhood doesn’t charge any commissions so trading on the app is free. They also do not charge any account maintenance fees or have any minimum required balances, making the basic Robinhood account experience entirely free (except for small regulatory fees that are passed on to investors by all brokers). This is in line with competitor Firstrade, which also offers this completely free account experience. That said, Robinhood does offer a premium account status that does come with a subscription fee, which we’ll get into next.

Robinhood Gold

Robinhood offers a margin account with a few extra perks that it calls a “Gold” account. This includes all of the standard features of a basic account plus access to Morningstar equity research, extended hours trading, instant access to deposits (no waiting for three day settlement period), plus access to margin (with a borrowing charge).

All of these features are included with Gold accounts for a $5 monthly subscription. This price also includes $1,000 of margin; however any borrowed capital above $1,000 incurs an interest charge at a flat rate of 5%. We should also point out that margin accounts have a $2,000 minimum balance requirement. Depending on how much money you plan to borrow, Robinhood’s Gold (a.k.a. margin) account can compare quite favorably to margin rates over at Firstrade, which start at 9.75% and only drop to 5.5% if you borrow more than $1,000,000.

Robinhood Virtual Trading Summary

Robinhood has pioneered the commission-free trading movement, and their bare-bones app makes investing easy for beginners. Although Robinhood has no paper trading and their investment offerings are not as robust as competitors like M1 Finance, they shine in other areas, such as their low margin rates (even after accounting for the Gold subscription fee). Overall, the app’s ease of use and navigation and the low or no cost structure makes it a good choice for beginners.

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