(BPT) - Robinhood was built for a new generation of investors. For millions of people who have felt left behind by America’s financial system. For people who felt turned away by the big Wall Street financial institutions. For those who are making their voices heard through the markets and showing the world that investing is for everyone.
Robinhood was founded to help more people build wealth — not just the 1%. Before Robinhood, investing required expensive commissions to place trades, making it impractical for people with smaller balances to participate. In addition, many were unable to satisfy minimum account balance requirements, or were otherwise uncomfortable walking into a financial institution to complete paperwork or answer jargon-filled questions they did not understand.
Robinhood pioneered commission-free trading with no account minimums. They built a modern financial services platform to serve everyone, regardless of their wealth, income or background. Because Robinhood believes that everyone should be welcome to participate in our financial system.
In late January, we witnessed something the stock market has never quite experienced before. Short squeezes on a small number of stocks triggered wild gyrations in prices, massive volatility that prompted clearinghouses to take swift action to protect the plumbing that handles stock trading every day.
In a matter of days, Robinhood’s clearinghouse-mandated deposit requirements related to stocks increased tenfold. These deposits are the collateral they post to ensure their access to clearinghouse services on behalf of their customers. They are what led Robinhood to put temporary buying restrictions in place on a small number of securities that the clearinghouses had raised their deposit requirements on. It was not because they wanted to stop people from buying these or any stocks — Robinhood was built to provide access to investing for all. And it certainly wasn’t because they were trying to help hedge funds.
It was a week that Wall Street and Main Street won’t soon forget. It is possible the unusual and dramatic market swings could occur again. Robinhood is committed to being a responsible partner and being there for its customers through any trading environment — and communicating about the rules their industry faces and how they’re living up to them so they can be here for customers for decades to come.
The world is witnessing a massive transformation taking place across financial markets, driven by the intersection of technology, democracy and finance, and one that is ushering in an entirely new era of financial participation and market dynamics. With a new generation of investors at the helm, the future looks a little brighter.
Robinhood Financial LLC is a registered broker dealer (member SIPC). Robinhood Securities, LLC provides brokerage clearing services (member SIPC). Robinhood Crypto, LLC provides crypto currency trading. All are subsidiaries of Robinhood Markets, Inc. (‘Robinhood’).
All investments involve risk, including the possible loss of capital. Commission-free trading means $0 commission trades placed on self-directed accounts via mobile devices or web. Keep in mind, other fees may still apply. Please see Robinhood Financial Fee Schedule at rbnhd.co/fees to learn more.