Commission free stock trading

For the longest time I wanted to start trading stocks, but was always turned off by the trading fees.  Just as an example, E*TRADE charges as much as $6.95 per trade.  At this rate if I made ten trades, then $69.50 will go to E*TRADE.  This does not make sense for someone like me who only trades about $500 each time.  This means 1.4% of my trade is going to E*TRADE.

Last December, I found an app on my iPhone called Robinhood.  Robinhood is a U.S. based financial services company that allows individuals to invest in publicly traded companies and exchange-traded funds listed on U.S. stock exchanges without paying commission.  Basically, you can trade using Robinhood and not pay any commissions as shown in their commissions & fees document.  There are regulatory trading fees, which come out as $23.10 per $1,000,000 of principal (sells only), rounded up to the nearest penny for SEC and $0.000119 per share (equity sell(s)), no greater than $5.95 for TAF.  These regulatory trading fees are negligible and will not be noticed.

To start testing Robinhood last December, I purchased the following stocks:

  • FCAU (Fiat Chrysler Automobiles)
  • AMAT (Applied Materials)
  • VSLR (Vivint Solar)
  • BAC (Bank of America)
  • F (Ford)

Since then I have received dividends for Ford, Applied Materials, and Bank of America.  These funds are placed into my Robinhood account and I was able to quickly purchase more shares with the money.  Robinhood easily allows you to transfer money from and to your bank account.  You can also transfer stocks from other brokers to Robinhood and Robinhood will cover any fees charged by your old brokerage.

Robinhood may not have a lot of bells and whistles like E*TRADE or some of the other websites you may use, but they are quickly adding features such as trade options.  There is also a new feature, which will allow you to trade crypto currency through Robinhood.  Some of these features do require you to first get on a waiting list.  Since Robinhood is free and does not have fees for trading, I would recommend you giving it a shot.  It has pushed me to learn more about the stock market and companies I have never even heard about before.

One Comment on “Commission free stock trading

  1. Pingback: Robinhood quick review – Civil Accomplishment

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