A brokerage startup called Robinhood aims to live up to the name with the launch of its new app for iPhones that will allow users to buy and sell stocks. The app is revolutionary to the stock market because it eliminates the additional cost commission fees, ultimately putting more money into the pocket of the user.
While it isn’t the first mobile stock app, Robinhood operates free of charge, without minimum balance or transaction restrictions, according to the write-up on Mashable.
Co-founder Vlad Tenev reasons that despite the evolution of stock market trading, very little of the savings as a result of the streamlining of the process has been given to the consumers. Inspired by the Occupy Wall Street movement, Tenev hopes to give consumers a monetary advantage by making the stock market easier to maneuver and more accessible than ever before.
“It’s been a decade since there were actual people on the trading floor touching every transaction,” said Tenev. “In the past 19 years, there’s been a lot of stuff that has been improved on the back end of what it takes to process a trade and very little of that has been passed down to the consumer.”
Of course, some worry that a user-friendly, no-fee, approach like Robinhood’s will make things too easy, and could encourage irresponsible impulse trading but, according to Wired, Tenev says that the app is more a way to encourage involvement rather than actual trading. He estimates that people will spend most of their time on the app checking balances and exploring stock options.
Like a bank, the app will monetize off of interest on margin trading and cash balances. The company plans to eventually offer some paid services— the use of which will be for a fee—but the basic functions will be available to anyone.