What is Robinhood and how can I buy stock through the app?
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WITH internet pranksters sending the stock market into disarray last week, amateur investors are turning to apps to get in on the action.
Platforms like Robinhood and Ustocktrade claim to make investing so simple that anyone can give it a go – though they come with their own risks.
What is Robinhood?
Robinhood is an app popular among amateur stock traders, with hundreds of thousands of downloads across Apple and Google's app stores.
The platform, which also has a website, offers trading tools, stock tips and even a cryptocurrency exchange where users can invest in Bitcoin.
Robinhood was founded by Baiju Bhatt and Vlad Tenev, two children of immigrants who met at Stanford University in 2005.
They were inspired by the Occupy Wall Street protests to create an app that made the stock market more accessible.
Critics argue that Robinhood "gameifies" investing, using tactics employed by addictive gambling apps to encourage users to buy stock.
It sends frequent push notifications to users about their stock positions, and when they make their first trade, confetti "rains down" in the app.
In response, Robinhood has argued that the app’s features "are meant for informational purposes only, and are not intended to serve as a recommendation to buy or sell any security."
How to buy stock through the app
Buying stock using Robinhood is fairly simple, and can be achieved using the mobile app or website.
You'll first need to sign up to a Robinhood account, which you can do .
It's worth noting, of course, that there are inherent risks attached to investing your money in the stock market.
No stock is guaranteed to rise or fall, and it is extremely dangerous to invest money you cannot afford to lose.
Plenty of people have lost a lot of money betting on shares, so proceed with caution and use common sense.
How to invest using the Robinhood app
- Navigate to the stock’s detail page. Here you can find the stock’s historical performance, analyst ratings, company earnings, and other helpful information when considering buying or selling a stock.
- At the bottom of the page, tap Trade and then Buy or just Buy, which will appear by default if you don’t currently own the stock.
- Enter the dollar amount you would like to purchase. If you’d like to order in shares, tap on the drop-down menu in the top right that says Dollars and choose Buy in Shares.
- Review your order and confirm that all the details are correct. If you’d like to edit your order, tap Edit in the top left.
- Swipe up to submit your order.
How to invest using the website
- Navigate to the stock’s detail page. Here you can find the stock’s historical performance, analyst ratings, company earnings, and other helpful information to consider when buying a stock.
- Enter the dollar amount you would like to purchase in the order window on the right side of the screen. If you prefer to purchase full shares instead, choose Shares from the drop-down menu next to Invest in.
- Click Review and confirm that all the details are correct. If you’d like to edit your order, tap the Edit button below the Buy button.
- If all looks good, click on Buy.
What is going on with the stock market?
Downloads of stock trading apps shot up this week after an amateur trading group on Reddit sent shares of some companies soaring.
Users in the subreddit WallStreetBets came together to fire GameStop's shares up a shocking 130 per cent on Wednesday.
The struggling store's shares are up a total of 1,700 per cent since the start of January, from $17.25 per share to $347.51 on Wednesday.
The Wall Street trolls, apparently led by finance expert "Roaring Kitty," are driving up share prices by betting against Wall Street short-sellers.
Short-sellers, despised by many, are big hedge funds that bet on a decline by selling borrowed shares in the hope of repaying at a lower price.
WallStreetBets is a group with several million members who share trading tips about how to beat "the system," and users have been on a GameStop buying spree.
The influx in purchases has been putting pressure on short sellers to make purchases to avoid steeper losses.
GameStop's three largest investors have made $3billion since the stock prices began climbing, .
WallStreetBet's followers have caused such a massive disruption to the stock market that they have attracted the attention of authorities, and even the White House.
"Our economic team, including (Treasury) Secretary (Janet) Yellen and others are monitoring the situation," White House Spokeswoman Jen Psaki said on Wednesday.
"It's a good reminder, though, that the stock market isn't the only measure of the health of our economy," she added.
The Securities and Exchange Commission also confirmed on Wednesday that it was monitoring the activity.
A number of big-time hedge funds who shorted GameStop stock speculating that share prices would fall are now dealing with massive losses.
Citron and Melvin Capitol said on Wednesday that they had closed out their short positions after suffering undisclosed losses. Experts speculate those could be in the billions.
GameStop isn't the only company being targeted by the Wall Street trollers.
Stock skyrocketed for other companies that had been heavily shorted by Wall Street firms as well.
AMC Entertainment's shares jumped a whopping 300% on Wednesday, and BlackBerry's were up 33 per cent.
Wall Street experts warn, however, that the skyrocketing stock prices will not likely last long, as they do not reflect the health of the businesses.
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In other news, you can read more about Redditors' crusade against short-sellers .
This handy web tool lets you know when the PS5 is back in stock at top retailers.
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