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Robinhood is a different type of brokerage. The technology-driven company cuts out overhead by eliminating storefront locations and full-service features, allowing customers to manage their stock portfolios with their phones. The end result is a useful stock trading app that provides all of the basics without any costly extras.
While people can trade for free with the app, some users choose to upgrade to Robinhood Gold, an advanced product offered by Robinhood. Robinhood Gold is available at a cost of $5 per month and offers additional features compared to the standard product.
|Margin trading?||No||Yes, if approved|
|Professional research?||No||Yes, read professional research and Level II market data|
|Instant transfers?||Yes, up to $1,000||Yes, up to your Portfolio Value starting at $5,000 (up to a max of $50,000)|
|After opening an account with Robinhood, you can upgrade to Gold by following the instructions lower on the page.|
Note: To sign up for Robinhood Gold, you can sign up for a regular account and upgrade to Gold from within the Robinhood app or the website. There is a 30-day free trial for Robinhood Gold.
What Does Robinhood Gold Offer?
Robinhood has made a name for itself by offering a wide selection of ETFs and stocks. Investors buy and trade the ETFs and stocks without paying fees or commissions. Those who upgrade to Robinhood Gold can enjoy even more features, but they still won’t have to pay commissions or fees on trades.
Some of these features include access to professional research and Level II market data, instant transfers up to your Portfolio Value starting at $5,000 (up to a maximum of $50,000), and margin trading if approved.
With margin trading, federal regulators require you to have a minimum of $2,000 of Portfolio Value (minus any cryptocurrency positions) in your Robinhood account. If you use more than $1,000 of margin, you’ll pay 2.5% yearly interest on the amount above that $1,000 mark.
Who Is Robinhood Gold For?
Robinhood Gold is appealing to investors who want more access to advanced investing methods. These investors make small investments, so paying commission fees is out of the question. Commission fees can add up and hurt small investors’ portfolios, but Robinhood Gold charges a flat monthly rate, eliminating that concern.
It’s appealing to people who make a large number of stock or ETF trades since they won’t have to pay commissions on every trade. In addition, mobile users typically like Robinhood Gold since they can use the app easily on the go.
Benefits of Robinhood Gold
Robinhood Gold comes with numerous benefits. Robinhood also shines when it comes to account minimums. Many people aren’t able to trade with other brokerages because they don’t have the minimum to open an account. Robinhood doesn’t have account minimums; however, users need to have at least $2,000 of Portfolio Value (minus cryptocurrency positions) to be eligible for margin trading.
Robinhood Gold is also a breeze to use. Users can sign up and fund their accounts in minutes, and they can start trading quickly and easily. The streamlined interface means that everything people need is just a click away. They can click on a stock and buy it just like that. Then they can go back to the app to monitor the stock. They can also view graphs and can see how it is performing in real-time. Robinhood has now also given Gold users the ability to see live bids and asks through Nasdaq Level II Market Data. Level II is likely helpful for users placing large orders and in situations where order volume is low. In short, Level II allows Gold users to analyze the depth of the order book as a way to identify situations where supply and demand may impact the future price of a stock.
Problems with Robinhood Gold
Robinhood Gold offers margin trading which comes at a risk to the user. While borrowing money to trade is enticing, it is possible to lose more money than what is originally invested. Borrowers could end up owing Robinhood Gold thousands of dollars if they are unlucky with their trades. Skilled traders can do well with margin trading, but those who are new to trading might not want to take on the risk.
Robinhood Gold also has a lack of resources available. This platform isn’t meant for research, so traders have to conduct that elsewhere. That means traders don’t have reports, analysis software, or educational resources on the app.
It’s also worth noting that Robinhood doesn’t have a feature for automated broker transfers. Investors who already have accounts set up with another platform cannot automate the transfer process. Instead, they have to conduct the transfer via the Automated Customer Account Transfer Service (ACATS).
Is Robinhood Gold the Right Choice?
People who want to open margin accounts can benefit from Robinhood Gold. Those who like the idea of commission-free trades but want a few more bells and whistles will likely be pleased with Robinhood Gold.
However, those who aren’t interested in margin trading and just need basic features might find that the standard Robinhood app is enough.
It’s a good idea to give Robinhood a test run, and you can decide to upgrade to Robinhood Gold later on if you think you are missing out on features. The company is currently offering a 30-day free trial for current users to test out the Robinhood Gold platform. Although, you won’t be able to downgrade afterward if you are using margin or the bigger instant deposit feature.
How Can I Upgrade to Robinhood Gold?
To upgrade to Gold on your mobile app, follow these steps:
- Tap on the Account icon in the bottom right corner of the screen
- Tap the 3 bars on the top right corner of the screen
- Tap Settings
- Tap Get Robinhood Gold
To upgrade to Gold on the website, follow these steps:
- Tap the Account menu bar at the top right of the screen
- Tap Robinhood Gold
Author: Jeff Gitlen, CEPF®