Robinhood glossary | Robinhood (2024)

FAQs

What is the Robinhood system glitch? ›

A Monday Robinhood glitch temporarily showed customers' balances at $0 or less. Users posted screenshots on Twitter of incorrect balances, with some in the negative. The snafu comes two weeks after Robinhood mistakenly listed AMC as bankrupt.

The company said in a regulatory filing that it received investigative subpoenas from the SEC about issues including cryptocurrency listings, custody of cryptocurrencies, and platform operations.

Robinhood Markets Inc., which offers 0DTEs on some exchange-traded products, plans to expand into broad index options later this year.

If your account is flagged for PDT, you're required to have a portfolio value of at least $25,000 to continue day trading. Your portfolio value is the sum of your cash, stocks, and options, and doesn't include crypto positions.

The US Court of Appeals for the 11th Circuit heard arguments Thursday from attorneys of investors who say Robinhood colluded with global market maker Citadel Securities LLC to unfairly block them from trading high-flying stocks in 2021.

No incidents reported today.

For instance, Robinhood is a very sleek and minimal application, and investor tools are rudimentary compared with those of other major brokerages like Charles Schwab and E*Trade. This can lead to hasty and uninformed decision-making, especially for novice investors.

No mutual funds or bonds: The lack of mutual funds and bonds may make it difficult to build a truly diversified portfolio. Customers can only access bonds via bond ETFs. Limited customer support: Robinhood has made noticeable improvements to its customer service, but it's still not on par with other brokerages.

Robinhood imposed trading restrictions on January 28–29, barring new long positions in GME and a few other stocks while continuing to permit unwinding of existing positions. This triggered a furious uproar among its customers and in the press, and many politicians also voiced outrage.

0DTE options are potentially less expensive compared to options with more days to expiration, or DTE (premiums can be in cents for 0DTEs versus dollars for longer-DTE options). The 0DTE market tends to exhibit little difference between the bid and ask price of each option—also known as a tight spread.

Can you start trading with $0? ›

There is no set amount required to begin trading as costs vary depending on the type of securities wanted. Some brokerages set a minimum amount to begin trading or to unlock margin or options trading.

Pattern day trading restrictions don't apply to non-margin accounts, they only apply to margin accounts. This means you can trade securities in a non-margin account without worrying about your number of day trades. Note, you won't be able to trade on unsettled funds from security sales while in a non-margin account.

Why Do I Have to Maintain Minimum Equity of $25,000? Day trading can be extremely risky—both for the day trader and for the brokerage firm that clears the day trader's transactions. Even if you end the day with no open positions, the trades you made while day trading most likely have not yet settled.

A system glitch allowed Robinhood customers to improperly short a meme stock in December that ultimately cost the company $57 million. Cosmos Health, a healthcare company listed on Nasdaq, initiated a one-for-25 reverse stock split on December 16, along with a change in name from Cosmos Holdings.

Robinhood has had some positive, and profound, implications for the market. The company has removed barriers to trading by making investing commission-free and mobile-first. It has simplified investing, and made it more accessible and personal. Robinhood says its tools are reaching a more diverse group of investors.

Under the proposed Settlement, Robinhood will pay $9,900,000 to settle claims related to certain alleged trading losses in connection with outages to Robinhood's trading platform on March 2-3, 2020 and March 9, 2020 (the “Outages”).