About

Robinhood is a stock-trading platform operated by a financial services company of the same name. Introduced in 2013 and marketed towards millennials and beginner retail investors, the Robinhood app and website reached significant recognition online following the 2020 market crash and has been a popular subject of memes and discussions in the investment community.

History

On April 18th, 2013, entrepreneurs Vladimir Tenev and Baiji Bhatt co-founded Robinhood Markets Inc, a U.S.-based financial services company. That year, the company launched its titular product Robinhood, a stock-trading platform accessed via website^[1] and mobile apps for iOS and Android (screenshots shown below).^[2][3]

Features

Similar to other stock brockers, Robinhood allows its users to trade stocks, ETFs, options and other types of financial instruments. The service is available both through Robinhood's website and its mobile apps.

Since launch, Robinhood offered zero comissions on stock and options trades. The advantage latet prompted other large stock brockers such as Charles Shwab, E*TRADE and TD Ameritrade to abolish comissions.^[4]

Highlights

Robinhood has been a popular subject of memes and discussions in the investment community, particularly in its major meme subreddit /r/WallStreetBets and on Twitter (examples shown below). In many examples, memes revolve around Robinhood traders being unexperienced yet sometimes lucky out on their trades.

Infinite Leverage

In late October 2019, Redditor /r/ControlTheNarrative discovered a loophole in Robinhood that allowed to increase his leverage indefinitely. After effectively raising his leverage 25:1, he bought Apple put options and lost nearly $45,000 in one day, posting a recording of himself watching his loss on /r/wallstreetbets. Upon seeing his major loss, /r/ControlTheNarrative uttered "Guh," with the exclamation becoming a major meme in the /r/WallStreetBets subreddit.

Suicide of Alexander Kearns

On June 13th, 2020, Twitter^[5] user Bill Brewster reported on the suicide of his cousin Alexander Kearns, a 20-year-old inexperienced trader who attempted trade options, who killed himself after seeing a $730,000 negative balance. Forbes^[6] speculated that Kearns might have attempted to trade what is known as "bull put spread," and didn't actually lose $730,000. Instead, Robinhood might have shown Kearns negative balance before the second leg of his trade was exercised.

In the following week, the story was covered by a large number of media outlets. On June 19th, Robinhood^[7] posted a founder letter, promising to implement changes in the app's eligibility criteria and its user interface.

Gamestop Stock Surge

Robinhood was a preferred app of /r/WallStreetBets users during the Gamestop Stock Surge, as a high volume of users on the app used it to trade Gamestop, AMC, and other /r/WSB-hyped stocks. The surges in the stocks led to Robinhood restricting trades on those stocks,^[8] leading to massive backlash towards the app.

Traffic

The app saw a spike in popularity in March 2020 due to the second leg of the 2020 stock market crash unfolding on March 9th, 2020. As of June 29th, 2020, Robinhood.com has been the 1,420s most popular website globally and 197th most popular in the United States. On Apple store, Robinhood app was the 5th most popular app in the Finance category and had over 1.8 million ratings. In the Play Store, the app had over 147,800 ratings.

Search Interest

External References