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How Robinhood Captures First Time Investors

PUBLISHED: Wed, 07 Oct 2020 19:11:35 GMT

Robinhood led the way for zero commission trading. It helped bring in a new generation of investors to the stock market. The Covid-19 pandemic and stay-at-home orders helped the trading app add 3 million users in the first quarter of 2020. “The Robinhood Trader” quickly became synonymous with retail trading. The company has made the stock market more accessible to millions of users but not without complications.

The beginning of 2020 created a unique moment for retail trading: Increased market volatility, stay-at-home orders, and zero commission fees across all trading platforms created a surge in activity and an increase in first-time traders.

These first-time traders, many in their 20s and 30s, found the stock market accessible. High prices had kept many on the sidelines for years. As sports events were canceled, sports betting was replaced with stock trading.

Stocks went to historic lows, and many young investors opened their Robinhood app. Robinhood has been the fintech darl…