Launching in December of last year for iOS users, Robinhood is finally arriving for Android users. A mobile based stock brokerage for US stocks, Robinhood is aiming to disrupt the trading industry by offering commission free trades on their app. Using a discount approach, Robinhood is attempting to recreate the brokerage model by replacing physical locations and manual power with technology.
While other brokers such as Zero have attempted to offer commission free trading in the past the model has yet proven to be profitable. Using a commission free model, revenues are collected from margin fees and order routing. As a result, to create a meaningful business by collection margins and payment for order flow requires a high volume of trades and leveraged customers. In this regard, by offering their services exclusively on mobile, Robinhood is targeting customers who are expected to be ‘always on’ with higher potential engagement rates for active trading.
So far, the firm has expressed strong demand for their free trading accounts, with the Android app topping the list of customer requests. According to Robinhood, as of last week, $1 billion in stock transactions have been processed on their trading app since their launch last year, with half of that amount occurring since May.
Beyond their app, also on their list is international expansion. Upon announcing that they had raised $50 million in new funding, Robinhood also revealed that they were opening soon in Australia. Yet to be opened the foreign venture has a Q4 expected launch.