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Stock Trading Was Expensive And Ugly. Robinhood’s App Makes It Free And Pretty

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by , 10-27-2015 at 03:40 AM (1374 Views)
      
   


Robinhood steals stock trading from rich guys in suits and gives it to normal people who couldn’t afford to pay $7 per transaction. The zero-fee stock trading app is bonafide hit. Less than a year after launch it has hundreds of thousands of users, over $1 billion in transactions, $66 million in funding, and an Apple Design Award. In fact, it’s the first finance app to win that award. But it’s still pushing to make stock trading stylish, not just simple.

“There are a bunch of brokerages with ugly stock apps and we’re not one of them” says Joe Binney, Robinhood’s VP of Product Engineering who was formerly at Facebook. Since its inception in 2013, Robinhood has put a huge emphasis on design because it’s trying to bring stock trading to a whole new demographic: young people.

The huge brick-and-mortar footprint of E*Trade and Scottrade meant they had to charge $7 to $10 a trade just to pay for overhead. But by relying on just a handful of engineers, Robinhood has used software to eliminate that fee. Suddenly, people who are only trading with a few hundred bucks won’t have all their gains erased by fees.

“Over the past 15 years, the underlying technology has changed and no player has put pressure on incumbents to change their pricing accordingly” says co-founder Vlad Tenev. That is, until Robinhood came along. “There isn’t some cost we’re eating. This is a completely electronic transaction.” (Disclosure: I knew Tenev and his co-founder Baiju Bhatt from college, and was in the same fraternity as Tenev.)

Just because it doesn’t charge for trades doesn’t mean Robinhood doesn’t have the potential to become a serious business. It’s already earning interest on the cash balances that users store with it. It’s also beta testing a way for users to pay a trial rate of 3.5% to trade using margin, or money they’re owed but that hasn’t deposited in their accounts yet.

Still, most stock tracking and trading apps aren’t built for a more casual demographic. “What makes existing products in the space so unfriendly is that you see all this information and none of it is specific to you so you have no idea what you should be looking at”, says Tenev. Impenetrable walls of acronyms and fluctuating dollar amounts are not how you democratize an already daunting activity.

Buy And Sell With Style


So today, Robinhood released its biggest app update yet. It brings little swipeable cards of personalized information about your portfolio and the market right to the home screen. The update comes to iOS today and Android soon.

Instead of having to hunt through websites and news feeds, Robinhood’s cards display breaking financial news, the S&P 500 top gainers and losers, your portfolio’s top gainers and losers, and updates about your bank transfers, scheduled and paid dividends, and orders.

Tap a card and a hosted page of content will spring up inside the app. And Robinhood also gave each stock in your portfolio or that you a track a ticker of top headlines about the company. So if a tech giant you own shares in releases a new app or has a bad earnings call, you’ll be able to learn about it and make trades all inside the Robinhood app.

Read more @techcrunch.com

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