Value of Robinhood Stock Trading App Reaches $1.3 Billion

The Robinhood app is a zero-free stock trading app, and it is rounding off a very big fundraiser for fueling its planned attack on old brokerage firms that are charging between $7 and $10 on each trade. This round is being led by Yuri Milner investment vehicle DST Global, and its value is as high as $1.3 billion. Robinhood developers were asked about this, but they declined to make any comment.

The ensure story of Robinhood app began in 2013 when the company opened the door to allow less-wealthy individuals to start investing. The app is very easy to use. It works perfectly for trading stock and stock’s free tracking.  The traditional brokerages were removed by Robinhood, like E*Trade and Scottrade; the brokerages were charging traders per trade, using the charges to pay off their marketing, sales staff, and brick-and-mortar franchise costs.

On the other hand, Robinhood does not require a brick and mortar office; instead, it employed the service of a smaller number of engineering-focused individuals. Consequently, no need to charge customers like the traditional brokerages were doing.  It also does not charge any per-trade fee, and it could pass the savings from this to the customers.

Over the years, Robinhood has expanded its services by building a platform, which makes it possible for other developers also to provide zero-free trades using their apps. The $10 per month premium Robinhood Gold option was launched just last year, which is its main revenue stream. Consequently, end users will not have to bother about the three-day period of waiting for depositing funds, enabling them to make trades instantly. The app also makes it possible for the end users to borrow double of the money they have in the deposit account for trading on margin with leverage.

According to a reliable source, Robinhood Gold has proved to be very popular as it has sold more copies than many expected.  As a result, it could have the momentum for big raise as many investors now seek to expand the issue.  Fees charged by Charles Schwab, an established broker, were lowered in February and this further increases the status of Robinhood.

While responding to this development, Robinhood said “we’re happy to see Charles Schwab lower its commission fees. Ideally, they would have eliminated them altogether, along with the required $1,000 account minimum. At Robinhood, we view commission fees as arbitrary markups like taxes, which discourage participation in the financial markets.”

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