Robinhood Crypto Trading App Launches ETF And Stocks Fractional Shares Investing
- Robinhood was the first broker to offer zero-fee trading.
- Fractional trading begins on December 16th.
Robinhood has established itself as a platform that makes trading affordable for all budgets, which is exactly what they’ve done with a new service – fractional stock trading. According to The Block, the California-based platform will be rolling out this new trading method to set themselves apart from potential competitors. To make this opportunity even more enticing, customers can get involved with just a dollar in some of these stocks.
This isn’t the first time that Robinhood has sought to gain an edge over competitors. The broker was the first to offer zero-fee trading in the sector, but that didn’t last. After a little time, many companies joined the bandwagon, including Fidelity Investment, You Invest (JPMorgan Chase), Charles Schwab, and Ally Investors. With that, the competitive edge was gone for Robinhood.
Just two months ago, Cash App made fractional trading possible to engage in this activity on their platform, while Charles Schwab announced that they would be doing the same. In November, JPMorgan Chase followed, offering fractional trading to clients that held under $5,000 in ETFs and cash balances.
Robinhood’s fractional trading feature will be available on December 16th, allowing some of the 10 million approved users to participate. The remaining users will be able to use the feature by the end of this year or beginning of next, according to reports from Business Insider. However, their edge is that consumers with only a few dollars will have access to this type of trading, while other institutions have limits.
Abhishek Fatehpuria, the product manager for Robinhood, spoke with Business Insider about the launch, stating,
“I think the user that we're particularly excited about is the first-time investor that wants to get started and maybe has a couple of dollars. They can build a diversified portfolio with a majority of the stocks they want to own.”
Robinhood has been working to diversify recently with new services, including the upcoming launch of a cash management account. Though Robinhood attempted obtain a banking charter, it was forced to withdraw.