I have been a big fan of discount brokers, primarily because of their low to zero trading costs and easy to use online brokerage platforms. However it looks the low cost broker wars have intensified with a strong new player in the stock trading scene, who is winning the race so far – Robinhood. They are an established broker now (now a public company), but continue to extend their business model with Options and Cryptocurrency trading.
You can also get a margin loan (a bit too easily if you ask me) if you want access to do some leveraged investing. But this is really only for advanced investors.
Thanks to a superior, no-fuss and very user friendly platform they are able to offer free trading and get some of the best trading prices. $0 commission brokers make their money from the spread on trades by charging you a little more than the price they pay for the stock from larger market makers.
After having done a lot of trading in options and stocks over the last 20 years, Robinhood has really revolutionized the stodgy world of retail trading with free trading using a modern and easy to use interface, which is very mobile friendly. You can check this out for yourself by signing up for a free account and take it for a spin. It literally takes less then 5 minutes.
You’ll also get a free stock for signing up and link to a bank account. Robinhood is a member of SIPC (like all reputable brokers) which protects investors from the insolvency of a brokerage firm for up to $500,000. Note that cryptocurrency investments are not protected by SIPC.
As always, start slowly and do your homework before investing. The Robinhood app makes the whole process very easy, including options to upgrade for access to analyst research, but you need to still do your due diligence before swiping up to buy!