How to use Robinhood: a beginners guide to the investing app
Right below, you will find more information about how to set up your Robinhood account, what products and investment options are out there, how fees are structured, and how to start trading.
Step one: setting up your Robinhood account
You can't open an account at Robinhood unless you:
- are 18 or older
- have a valid social security number
- have a legal US residential address
- are a US citizen, US permanent resident, or have a valid US visa
To finalize your account at Robinhood, you'll have to:
- Fill in your personal information (for example address, date of birth and social security number)
- Answer short questions relating to your trading experience
- Verify your identity with your driver's license / identity card / passport. A photo of the documents taken with your mobile will do.
Overall, the whole process is user-friendly, quick, and fully online.
Step two: understanding your investment options
Robinhood's product selection is not as broad as at other brokers, it only provides stocks, ETFs, options and crypto. The products focus only on the US markets. For an overall summary, read the 'Markets & Products' section of our Robinhood review.
Stocks on Robinhood
Stocks grant you ownership in a company. Let's say a company is a pie. If you want to own a piece of the pie, you buy a stock that is a 'share' of the pie.
Robinhood gives you access to around 2,700 stocks. The majority of these are listed on major US stock exchanges. You can also find some non-US stocks, which are provided through ADRs rather than indirectly through foreign exchanges.
ETFs on Robinhood
An ETF is fund traded on a stock exchange. A fund can include any assets types, like equities, bonds, commodities, and even forex. One fund usually has more assets. For example, a fund that is following the S&P 500 Index holds 500 equities. The most popular ETFs are equity ETFs that follow popular equity indexes, like NASDAQ 100 and S&P 500.
Robinhood has around 2,300 ETFs available for trade.
Options on Robinhood
Options is a collective term for financial contracts that give the right to buy or sell a certain product at a pre-agreed price. This opportunity is optional, you don't have to use it, hence the name: option.
Gold on Robinhood
Throughout history, gold has been the ultimate symbol of wealth and the cornerstone of the financial system. However, it is not possible to trade gold on Robinhood.
Cryptocurrencies on Robinhood
Cryptocurrencies are digital currencies created by cryptographic means using blockchain technology. Similarly to traditional currencies they can be used for buying products and services.Robinhood gives you access to a good selection of cryptos. You can trade major cryptocurrencies like Bitcoin or Ethereum, and can follow with real-time data the minor ones like Monero or Stellar.
Step three: understand the fees
Robinhood was one of the first brokers to offer free stock trading on their platform. Their fee structure stood the same. Stock trading, deposit and withdrawal is free.
We have prepared an article just for you to explain how Robinhood's fee structure looks like - enjoy!
Step four: start trading
Robinhood's trading platform is fairly easy, and straightforward. If you'd like to invest in one of the products above, follow these steps:
- Open robinhood.com, and log in to the platform
- Either on the web platform or on the mobile trading platform, look for the crypto of your choice in the search bar
- Set your orders, and confirm your order