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Robinhood is expanding its services for investors, further transitioning from a novelty mobile app for first-time investors to a more extensive platform for more advanced investors. As part of this strategy, the company announced a couple of new features this week to appeal to active traders.
3 big things Robinhood will start offering traders
Robinhood has been known for its commission-free trading and sleek app interface. By eliminating the fees that other brokerages typically charge for each trade, investors can buy and sell stocks, bonds, options and even cryptocurrencies easily without having to pay fees to Robinhood for executing the trades.
Now, the company is shifting to expand its offerings. Here are three big things Robinhood will start offering over the coming months to attract more active traders.
1. The launch of Robinhood Legend
Robinhood launched a one-stop, desktop trading platform this week called Robinhood Legend built with active traders in mind. If you already have a Robinhood account, you have access to Robinhood Legend, which rolled out this week, at no additional cost.
“In looking at the landscape of trading tools and by talking with active traders, we realized there is frustration with legacy offerings,” said Steve Quirk, chief brokerage officer at Robinhood in a news release. “Specifically, moving back and forth between apps or charting platforms can be cumbersome and time consuming.”
Robinhood Legend offers users the ability to access advanced trading tools, such as seeing data in custom intervals and viewing multiple charts; more analysis with dozens of metrics to monitor trades; custom layouts; real-time data; one-click orders; and syncing across layouts, tabs and monitors.
2. Futures trading
Responding to feedback from traders, Robinhood also added futures trading to the app. Customers can now trade in futures on the S&P 500, Bitcoin, oil and other assets nearly 24 hours a day.
Futures are essentially a financial contract that gives the buyer an obligation to buy a commodity or other type of security at a set price at a predetermined date in the future. The seller must deliver the goods at that price.
Depending on the type of Robinhood account you have, commissions for trading futures will be as low as $0.50 per contract for Robinhood Gold members and $0.75 for non-Gold members. Additionally, the 60/40 tax rule applies to futures trading on Robinhood, with 60 percent of gains taxed as long-term capital gains.
3. Index options
Rounding out its new features, Robinhood announced that it will offer index options. Options trading gives the holder of the options contract the right, but not the obligation, to buy or sell an asset at a predetermined price by a set expiration date. Index options are tied to the value of a specific index at a specified strike price.
Fees for trading index options will be $0.35 per contract for Gold members and $0.50 cents for non-Gold members. Regulatory and exchange fees are not included in the contract price. The 60/40 tax rule applies to index options too.
