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Trading comes with risks, so it’s helpful to get real time quotes to help you make the best trading decisions. If you’re new to Robinhood, you may wonder if the platform also offers real-time quotes.
Robinhood has real time quotes. The quotes are part of the service offered by the platform. Real time quotes remove some of the guesswork from trading and help investors mitigate risks.
With the power of real time quotes, you (the investor) can have the most current information at your fingertips, allowing you to prevent profit loss. Robinhood provides its members with real time quotes at no cost, which is great. Keep reading to learn more.
Robinhood’s Real Time Quotes
Robinhood’s real time quotes provide the price of a stock at that very moment. The real time quotes provide investors and traders with the exact price.
Securities’ prices can fluctuate throughout the day because various factors impact the market.
With Robinhood’s real time quotes, investors have an idea of the supply and demand of the stock. Their quote contains the price, the number of shares available, and the exchange where it’s available.
Delayed quotes, on the other hand, will have a 15 to 20 minute lag. Delayed quotes generally provide a roundabout indication of the direction of a stock.
Delayed quotes are financially beneficial for brokerage firms as real time quotes are costly.
For casual investors, a delayed quote may be inconsequential. But Robinhood understands that for their traders, delayed quotes can be detrimental.
Particularly in fast markets, a 15-minute delay could turn a profitable stock into a loss.
Robinhood’s Real Time Quotes Are Powered by Nasdaq
Robinhood’s real time quotes are powered by the National Association of Securities Dealers Automated Quotations, better known as Nasdaq. Specifically, Nasdaq’s Last Sale provides Robinhood with real time last sale prices.
In the US, Nasdaq has the most liquidity when compared to other exchanges. Therefore, Nasdaq is a highly reliable source.
Last Sale reporting was born of the need to maintain transparency. Thus, Nasdaq has last sale reporting requirements to follow.
Dealers are required to submit the details of a completed transaction within 90 seconds. They must provide the name of the stock, the number of shares traded, and the buyer’s price.
Robinhood’s Competitive Edge
Robinhood launched in April 2013 and almost became an immediate disruptor to the industry. Its niche is simple trading – it’s geared towards young, first-time investors.
However, the user base boomed beyond its target market. Today, Robinhood has amassed roughly 22.5 million users.
Robinhood monetized on low cost and free services. The company boasts commission-free trading, a significant competitive advantage.
Robinhood charges no fees for opening an account, account maintenance, or account inactivity. Investors can purchase fractional shares for as little as $1.
Robinhood’s website and mobile app features are basic, staying true to Robinhood’s goal of simple trading. The mobile app itself is easy to set up, navigate, and use.
To further simplify investing, Robinhood offers recurring investments and dividend reinvestment.
In 2018, Robinhood expanded to cryptocurrency trading, with a waitlist of 1.25 million users in line to utilize the new investment. It remains one of a handful of brokers that allow free cryptocurrency trading.
In September 2021, Robinhood announced another new product: the crypto wallet, which is well received and again has over 1 million users waitlisted. The crypto wallet will make it easier for users to send and receive cryptocurrency between each other.
Robinhood Gold Offers Premium Features Like Margin Investing
Robinhood Gold is an upgraded version for users. The Gold plan takes investing to the next level. It costs $5 a month, and often the first month’s fee is waived.
It gives users access to premium features.
Robinhood Gold provides its members with level II market data from Nasdaq. Level II market data expounds upon the real time quotes. Information for level II market data is driven by Nasdaq TotalView and provides more than the best bids and asks.
TotalView gives investors an in-depth view of orders and quantities, providing more information for better-informed trade decisions.
Robinhood Gold also unlocks margin investing. Margin investing is when an investor uses margin securities or current cash in their brokerage account as collateral for their broker or exchange to cover credit risk.
Moreover, it allows an investor to borrow funds from a broker to trade. In margin investing, the collateral loan charges interest.
For Robinhood, the interest rate is 2.5% annually for any amount over $1,000. The benefit of margin investing is it allows the investor to buy more stock than they would be able to purchase otherwise.
Margin investing is effective as long as the anticipated return on investment is higher than the interest on the loan.
Robinhood Mostly Profits From PFOF
Because Robinhood doesn’t charge its users to trade, many wonder how this company generates revenue. Robinhood earns some revenue from the interest of its margin loans, as mentioned above.
However, approximately 75% of the company’s revenue in 2020 came from PFOF or payments for order flow. PFOF is a process where a broker, like Robinhood, receives compensation from a market maker in exchange for client trade orders.
This profit, typically a fraction of a penny, can net significant profit. According to Fortune, Robinhood’s first quarter of 2021 earned almost $423 million from PFOF.
Drawbacks To Robinhood
Robinhood has its cons as well. One is its limited offerings. Unlike other free-trading platforms, Robinhood only offers taxable brokerage accounts: cryptocurrency, ETFs, options, and stocks.
There are no options for mutual funds or retirement accounts.
Another is a lack of educational resources available for users. While educational resources are missing, Robinhood offers a podcast, videos, and a 3-minute newsletter called Snacks to provide its users with current daily finance news.
Furthermore, Robinhood doesn’t have a listed phone number for customer service calls previously. Users are forced to contact the company via chat, enter a phone number for a callback, or contact them through social media.
Not having a customer service phone line is discouraging to some investors and a common complaint. In early October, Robinhood COO Christine Brown stated that the free-trading platform would add 24/7 phone support for users and triple its customer service team.
Robinhood offers real time quotes to its users, empowering and providing them with the information needed to trade with confidence. Real time quotes are free, along with many other aspects of Robinhood trading.
While the platform may have some drawbacks, it’s a popular choice among many, particularly first-time investors.