Robinhood to the Rescue for OTC Traders
We’re all familiar with the story of Robinhood, the bandit that steals from the rich and gives to the poor. People are split when it comes to discussions about Robinhood’s ethics, but that’s not the Robinhood that’s swooping on to our trading desks. This Robinhood is something that will be appreciated by all retail traders, and the best part is, this Robinhood is up with the times (it doesn’t come wearing green tights and a silly hat).
We have all become accustomed to paying $7-10 per trade, meaning at least about $15 round-trip for each position that we take. Companies like E*Trade, Charles Schwab, ScottTrade, and TD Ameritrade have been raking in huge profits from their retail trading clients for well over a decade through their online trading platforms. Traders are tired of paying so much for their trades, and this is the opportunity that the Robinhood trading app has in its sights.
This app will offer a free trading system where traders pay $0 in commission charges. With Robinhood looking to rob E*Trade and other discount brokerages of their clients, it will be exciting to see how the retail trading sector changes in the next several months. There are nearly 350,000 traders pre-registered and excited to take the leap to this commission-free trading app.
At this time, traders will only be able to trade the stocks of companies trading in the U.S. markets. This includes OTC Markets listed stocks. With many OTC traders having swing or intraday trading styles, trading is more frequent than for longer-term blue chip holders. These costs quickly add up, and Robinhood could quickly steal a sizeable market share of the OTC Market trader.© Copyright 2016 OTC News Magazine. All rights reserved.