The Wrong Side of the Game Vibe Asserted by Robinhood

Robinhood’s gamification makes trading fun and exciting, what could go wrong?

Robinhood is an American app-based stock brokerage company that offers commission-free stock and ETF trading (FastCompany). According to their website, “Robinhood’s mission is to democratize finance for all” (Robinhood). It was founded in 2013 and the app was launched in 2015 by two former Stanford University roommates, with the hopes of “democratizing” the financial markets, which were not charging fees to the big investment banks but were charging fees to everyday investors (thestreet.com).  

Wall Street has long been likened to a casino. Robinhood, an investment app that just filed plans for an initial public offering, makes the comparison more apt than ever.

That’s because the power of the casino is the way it makes people feel like gambling their money away is a game. Casinos are full of mood lighting, fun noises, and other sensory details that reward gamblers when they place coins in slots.

Similarly, Robinhood’s slick and easy-to-use app resembles a thrill-inducing video game rather than a sober investment tool. The color palette of red and green is associated with mood, with green having a calming effect and red increasing arousal, anger, and negative emotions. Picking stocks can seem like a fun lottery of scratching off the winning ticket; celebratory confetti drops from the top of the screen for the new users’ first three investments.

Usability

Robinhood is extremely easy to set up and use. Thanks to a mobile app with a clean design that focuses on the basics, Robinhood is an easy choice for investors who primarily use devices to manage their accounts. You can also use the web-based platform which has a similar look and feel to the app. Both platforms support the same order types and asset classes. 

Once you log into the app, you will see a line chart that shows your portfolio value and buying power. You will find the main menu on the bottom of the screen, where you can easily use the search function to pull up a stock’s chart over multiple time frames. You’ll see information pertaining to the stock, including its highs and lows, market capitalization, and P/E ratio. Robinhood also provides a news feed, a composite of analysts’ rankings, and a company profile. When you’re ready to make a buy or sell decision, the trade button scrolls along with the page, allowing you to submit an order at any moment. 

About the Wrong Side

Robinhood has little in the way of research or educational resources available for customers. If you want more than the basic stock quotes, you will likely need to subscribe to Robinhood Gold. Even then, it lacks resources when compared to its competitors’ offerings. It doesn’t offer any mutual funds or fixed-income investment products and you will not be able to trade any commodities, forex, or futures. Moreover, Robinhood only supports taxable brokerage accounts. Payment for order flow statistics is usually published by brokers. It is the best way for investors to compare and ensure accurate and timely trade executions. Robinhood doesn’t disclose this important information to the public and loses points for this lack of transparency.