A Letter From Robinhood Co-Founder & Co-CEO Vlad Tenev

Earlier this week, we were proud to announce Clearing by Robinhood, our new clearing system. We shared a lot about how Clearing by Robinhood will improve our ability to launch more products and provide you with an even better experience. Now I want to share a few details about how our trading system works. I want to use this opportunity to shed light on how Robinhood executes your orders: no jargon, only the facts.

Better execution quality. Better prices.

When you buy or sell stocks on Robinhood, like many other brokerages, we send your order to market makers like Two Sigma, Citadel, and Virtu, instead of exchanges like NYSE. Market makers don’t front-run your orders — they’re actually required by Regulation NMS to execute your order at the best price among all of the exchanges, and unlike exchanges, they don’t charge fees.

We don’t play favorites.

To compete with exchanges, market makers offer rebates to brokerages. This isn’t unique to Robinhood. E*TRADE, Schwab, and TD Ameritrade, among others, all get rebates from market makers in addition to the commission they charge you per trade. To ensure we have a fair system, we don’t take rebates into consideration when we choose which market maker will execute your orders. Also, all market makers with whom we work have the same rebate rate. We send your orders to the market maker that’s most likely to give you the best execution quality. For even finer control, we offer limit orders and stop limits, which allow you to name your own price.

We’ll always be committed to offering commission-free trading for everyone.

The revenue we receive from these rebates helps us cover the costs of operating our business and allows us to offer commission-free trading. Robinhood earns ~$0.00026 in rebates per dollar traded. That means if you buy a stock for $100.00, Robinhood earns 2.6 cents from the market maker. Other brokerages earn rebates and charge you a per-trade commission fee.

We’ve grown to over six million customers in under four years by offering our services at a dramatically lower cost and better experience than others. We started with commission-free stock trading in 2015. We heard that you wanted more from us, so we added commission-free options and crypto trading earlier this year. Over the next several years, you should expect more of the same — our goal is to build the world’s most customer-centric financial company. For you, this means even more products with a spectacular customer experience and the lowest possible prices.

Check out our new Help Center section with even more information.

– Vlad Tenev

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Introducing Clearing by Robinhood

A new system that lowers fees and makes Robinhood faster and more reliable

For the past five years, we’ve worked to democratize America’s financial system. With a relentless focus on building what you want most, we’ve expanded from a stock-trading app to an investment platform offering commission-free investing in stocks, ETFs, options, and cryptocurrencies. In doing so, we’ve become one of the fastest-growing brokerages with over six million customers.

In order to move faster and offer more financial services to you, we realized we had to build our own clearing system—a core piece of infrastructure for brokerages—instead of relying on a third party.

Two years ago, we embarked on our most complex engineering and regulatory challenge: building our own clearing system from scratch. We received licenses from FINRA, the DTCC, and the OCC (Options Clearing Corporation); we assembled a team of nearly 100 people in Lake Mary, Florida, many of whom specialize in clearing and compliance; and we engineered powerful systems to help us deliver more products to you with an even better experience.

Clearing by Robinhood is the only clearing system built from scratch, and on modern technology, in the last decade. The last time a major brokerage built something similar was Vanguard, in 2008.

In a few weeks, you’ll see a message in the app about Clearing by Robinhood. Before the end of the year, all Robinhood customers will be on our new system. Here’s what this means for you:

Removing and Lowering Fees

With Clearing by Robinhood, we’re removing or lowering a bunch of small, frustrating fees that were previously passed on to some of you. Before, bank reversal fees were $30, but once you’re on the new system, the fee will only be $9.

Improved Customer Support

Clearing by Robinhood gives us more account and trade information so we can offer you better customer support. To help with this, we designed an internal dashboard for our brokerage and support reps, lovingly named Major Oak after Robin Hood’s home, that updates information in real-time. You should see quicker response times in the coming months.

Better Experience & More Products

Once you’re on the new system, you’ll see completely redesigned monthly account statements, tax documents, and proxy notices, written in simpler language and with the Robinhood look and feel.

Clearing by Robinhood will also pave the way for us to ship new features even faster, expand into different financial services, and welcome millions of more people to the financial system.

Learn more about Clearing by Robinhood on our Help Center.

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What’s New on Robinhood

Candlestick charts, discovery tools, and more

Over the past few months, we’ve been working on a number of new features to make Robinhood even better. Here are the latest additions to the platform:

Introducing Candlestick Charts

We’ve received daily requests to add candlestick charts to Robinhood, and over the next few weeks, we’ll be bringing them to the stock, options, and cryptocurrency pages on mobile.

Candlestick charts help investors better understand how prices move. While a line chart shows you only the close price, each candlestick shows you four pieces of information: the open, high, low, and close price during a certain time period.

To view candlestick charts, tap the candlestick icon on the bottom right corner of any stock, options, or cryptocurrency chart. Learn more here.

More Research & Discovery Tools

To help you make better-informed investment decisions, we’re bringing some of your favorite web features to mobile, including:

  • Analyst Ratings: Read commentary and view the buy, hold, and sell ratings from Wall Street analysts.

  • People Also Bought: Discover other stocks investors bought on Robinhood, including competitors, suppliers, and more.

  • About: Find quick facts about stocks, such as the company’s CEO, its founding date, and where it’s headquartered.

Explore: More Information at a Glance

Now you can see top movers, popular Collections, and recent news when you tap the search icon in the upper right corner of the app.

Options, Now on Web

We’re bringing all options features available on mobile to web. Now you can open, close, and monitor your options positions, as well as sign up to trade options, on web.

In case you missed it, we’re also adding over 250 global stocks to Robinhood, and recently launched free extended market hours for everyone. We hope you enjoy these updates – look out for more features in the coming months!

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Introducing Global Stocks on Robinhood

Invest in over 250 global companies like Tencent, Nintendo, or Adidas, commission-free

Many of you have expressed interest in investing in global companies that aren’t currently available on Robinhood. Today, we’re thrilled to announce that we’ll be rolling out American Depositary Receipts (ADRs) on Robinhood, adding over 250 new stocks of global companies.

Invest in companies you love from around the world, from countries including China, Japan, Germany, Canada, and the United Kingdom. Some of the most frequently searched companies, such as Tencent, Nintendo, and Adidas, will be available on Robinhood, along with many others. Search “New on Robinhood” on mobile or web to view the full list.

In the coming months, we’ll also expand the global list with stocks from France, including most frequently searched companies Ubisoft Entertainment, LVMH, and Michelin.

ADRs allow you to invest in companies that are based outside the U.S., and aren’t listed on U.S. stock exchanges such as Nasdaq and NYSE. You may also choose to invest in global stocks to diversify your portfolio. As with U.S. stocks, you can invest in ADRs on Robinhood commission-free. Learn more about ADRs on our Help Center.

Stay tuned for more updates soon!

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Ethereum Classic is Now on Robinhood Crypto

You can now invest commission-free in Ethereum Classic

Starting today, you can invest in Ethereum Classic on Robinhood Crypto, commission-free.

You can also invest in Bitcoin, Ethereum, Bitcoin Cash, Litecoin, and Dogecoin, as well as track market data for 10 other cryptocurrencies.

Robinhood Crypto is currently available in 19 states, and we’re working on expanding to more. You can view the full list here.

Learn more about investing in Ethereum Classic and other cryptocurrencies on our Help Center.

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Extended Market Hours, Free for Everyone

You can now invest pre-market and after-hours, for free

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To stay true to our goal of offering everyone the best financial products, we’re making extended market hours available to everyone on Robinhood, for free. 

Standard U.S. market hours are from 9:30 am to 4:00 pm Eastern. With extended market hours, you’ll be able to invest from 9:00 am to 6:00 pm Eastern. This means you can start investing 30 minutes before the regular market opens, and continue investing two hours after it closes. 

Here are two scenarios where having access to invest in extended market hours can be beneficial:

Earnings Announcements
Companies may announce quarterly earnings reports before or after regular market hours, resulting in price swings. With extended market hours, you can make investment decisions during these times of volatility.
 
Activity in Foreign Markets
News and activity in foreign markets, such as in the European and Asian markets, can affect U.S. stocks despite occurring outside of regular U.S. market hours. With the market hours extended, you can take action when you need to. 

Before today, investing during extended market hours was one of the features in Robinhood Gold. As a Robinhood Gold customer, you still have access to additional buying power and bigger instant deposits from your bank account. You can make changes to your Robinhood Gold settings in the app or on web.

Bringing extended market hours to everyone drastically improves the core Robinhood experience. We’re always working to make Robinhood even better, so stay tuned for more updates soon!

Learn more about Extended Hours.

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