What makes it great: When Robinhood launched in 2013, it disrupted the industry with its commission-free stock trading. Today, that’s basically the price of admission if you want to be competitive as an online stock broker. However, options trading is one area where Robinhood still undercuts most of its competitors. Not only does it charge no commissions on options, but it doesn’t charge any per contract fees either.
Robinhood is optimized for mobile and active traders, though it could also work for long-term investors looking to avoid fees standard at other online share trading centers. Customers can optionally upgrade to Robinhood Gold for $5 to access additional features, including margin borrowing and instant deposits up to $50,000.. And unlike several names on this list, Robinhood also supports crypto trading – although at present only seven coins are tradable on the platform.
Potential drawbacks: Robinhood doesn’t support mutual funds, which is a drawback for some investors. It also requires a $5 monthly charge for all market data and research access. The biggest drawback of Robinhood is a history of outages and regulatory missteps, though it seems those issues may now be resolved. Regardless, it’s good to be aware before signing up.
Commissions and fees: Robinhood doesn’t charge any commissions or fees on trades. The only fee customers can incur is an optional $5 monthly charge for Robinhood Gold, It should also be mentioned that Robinhood relies on the somewhat controversial practice of receiving Payment For Order Flow (PFOF) to monetize its clients’ trading activity in lieu of charging commissions.
- No commissions or fees for regular use
- Trade stocks, ETFs, options, and cryptocurrencies
- Optimized for active, mobile traders
- No mutual funds
- No retirement accounts
- History of brief outages and regulatory troubles