When it became clear that the pandemic will lead to economic hardships, people started paying attention to a fintech innovation known as the Robinhood Markets.
Financial experts noted that when health and economic crises started taking place, an increasing number of Internet searches for potential online investments led many to the discovery of the Robinhood Markets app. The mobile application presented a seemingly safe and fair method of generating passive income on their rapidly dwindling surplus money.
What is the Robinhood Markets App?
The Robinhood Markets app is a mobile application that allow retail investors to participate in stocks and money market trading without the need to pay for commissions, which investors ordinarily pay to financial advisers who broker investment deals.
The fintech company behind the Robinhood Markets app offers a no-frills platform that provides app users with numerous stock or money market trading options for which the Robinhood fintech acts as broker. Rather than deduct commissions from brokering stock trades, the Robinhood fintech firm receives compensation and discount benefits from the different parties to which they directed the flow of investment toward trade executions.
The Robinhood platform operates like any investment trading network, showing real time trading activities, whilst indexing which investment options are going up or going down. App users can also access educational resources and easy-to-learn investing tools. Even newbie stock investors learned how to make informed decisions when choosing trading options that have the likeliest potential to yield revenues during an ongoing economic crisis.
Still, for certain trade options like the Robinhood Gold, members can have access to related features in exchange for a minimal $5 monthly fee.
The Robinhood Markets mobile app, was actually intended as an entry-level trading app and therefore did not gain much traction among millennials until later. Yet in 2019, the mobile app started gaining popularity when it introduced the Fractional Shares feature, as it opened opportunities even for those who can afford to risk smaller values.
Robinhood Fractional Shares Feature
The Robinhood Fractional Shares feature enhanced the mobile trading app’s functionality. It presented opportunities for safe and balanced investing by making it possible to invest with just a small amount of money. Robinhood investors can choose to invest with as low as $1 on a stock option and become a fractional owner of a stock share.
Although this feature denotes minimal earnings in proportion to the fractional value of one’s investment, a retail investor can spread his investments in different stock options. In effect, the feature lessens the risks of exposing one’s limited investment money to a single or few trade executions.
However, since only a fraction of a share is owned, such investments cannot be traded out of the Robinhood Markets platform.