Are there any banks that allow you to have a brokerage account with robinhood? Seems to be the best option out there for cash sweep and margin investing. I’m looking to be trading ETFs and related ETF options only.
Anyone mind sharing their thoughts on this?
Thanks!
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Vanguard. It's idiot proof. I was gonna put a bunch of money in TQQQ during the tech bubble but they wouldn't allow me to invest in leveraged products.
I think the big limitation is the types of securities and trading you're allowed to have/do. I'm pretty restricted so I'm fine with an old Fidelity account I've had forever. (They are absolutely horrible for purchasing newly listed funds though. I've literally told the rep "I'm Bloomberg messaging the issuer's head of capital markets right now, my order is fine, can you please pull the restriction for thinly traded securities, it started trading 15 minutes ago," and it still takes an hour to put in an order.
If you have carte blanche, I've heard good things about Interactive Brokers. They're not as "retail" as Robinhood.
100% agree on the limits brought on by the RTL. Try working for an SEC reporting house and imagining what that RTL looks like. I'd need an entire ream of paper to print it off! Securities? Nope. Public REITs? Nope. Mutual Funds or ETFs? Some yes, the ones repped? Nope because you have inside information. Wish congress had to actually follow their own rules they legislated for the rest of us especially since I've worked on those public reportings and even the employees of the companies have to file Form 4's and 5's or 13's about their trades...but that's a different topic.
Interactive Brokers is a reputable shop. I use them for my FOREX trades and it's been top shelf. Unlike Robinhood, they don't make their revenue by front-running your orders or selling your order inputs to Citadel and the other big boys who use it for HFT. Otherwise I'd vote for Vanguard or Fidelity like the posts above.
Edit: Forgot the 144's and 144A. F*** the limp wristed SEC and their egregiously self serving overlords known as congress. I'd tell you how I really feel, but I don't need to be yeeted off here.
I disagree on front-running from the other more "retail" type brokers. Big market makers (Citadel, Jane, Virtu, etc.) make money by collecting the spread (selling at $10.01 and buying at $9.99, or whatnot) all day long. Their big risk is being the low-knowledge person on the other side of a trade with somebody that has market-moving info, and 'getting their face ripped off.' (that's a technical term btw) They'll gladly cut their profits in half knowing that your not some big hedge fund with your few-hundred-share trade. It's essentially risk-less money for them. That's why I'm ok with them selling my order. I normally see improvement from NBBO letting them sell my flow, and I have real-time data on my BBG.
I probably could've explained myself better. You're right Robinhood themselves may not necessarily make money front-running. But the Citadels of the world make money on sub-pennying orderflow on the NBBO due to the data they buy from Robinhood, and can front run accordingly. Since for the retail investor/trader only buying a few hundred shares max at a time; when you, me, and whoever else in Nebraska, Idaho, or god knows where put in orders to buy or sell at the same price, the volume stacks up and does make it worthwhile to the bigboys who have blocks to move. Especially if they're playing in the darkpool space too. Not to mention depending on the security, now we're involving the rebates from the NYSE to tack on even more money for them moving that volume.
But if you feel it's working in your favor, I hope your PnL agrees with it and you're coming out ahead regardless. For me, just not a fan of it out of principle. But I make no bones about my beef with the SEC and how they "regulate" things either.
I've got a minimum holding period of 30 days on anything I buy, and I normally buy ETFs where anybody with serious cash would just go to an AP and transact in the underlying, so I'm not exactly an active trader. If I was to actually do individual securities the rules would be significantly more onerous still, so for my usage the price improvement is worth it.
ETFs you say? RTL in action lol
I get it if you're working from the buy and hold perspective versus the college student who thinks they're going to be next rockstar day trader who would feel an accumulation of the sub-pennying effects. I agree that if you're looking at that extended timeline, a cent to two cent gap from your sell order price to when it clears isn't much to worry about if you're looking at even just a $1/sh gain. If not $10, $20, $100/sh or whatever if you managed to sniff out an ETF in a sector that's going to blow up big and held on for the ride.
Speaking of sub-pennying the NBBO and the big boys, I forgot to mention part of my beef with it is when their algos have tried to do that to each other and it crashed specific equities and even indices when there was no true underlying issue like the CFO getting indicted for fraud or the FDA announcing that they're forcing them to do a national recall on something, etc, etc.
Fidelity and/or Interactive Brokers. Have an account with each, use IB for margin (arguably the best rates if you have a large account) & options trading and Fidelity for just straight stocks/LEAPs (also selling CCs). Robinhood is utter TRASH and will close out your positions without notice even if you don't have margin turned on should they decide it's "too risky", happened to me twice and created a big fuck-you with my taxes that year.
Never get Robinhood. Remember they sell your trades info to hedge funds and help prevent squeezes
Wow. Utter lack of market structure knowledge after I explained why allowing pay for flow is largely beneficial. What do you base your knowledge on dude? Mine comes from discussions with the heads of cap markets at a few top 20 AM firms.
It's not an utter lack of market structure knowledge, figures like Dave Lauer whom I would argue have a far better understanding of the pros and cons of the practice than most on this forum have made it abundantly clear how the practice of PFOF is NOT beneficial to retail traders. Of course the heads of various AM firms like the practice, because it is a net benefit for large institutions. This is not a conversation about how it is beneficial for institutions, but for an individual retail trader. Just because a given practice has been made legal as a result of massive lobbying efforts does not mean it is ethical or good for the market as a whole. That PFOF was massively advocated for by Bernie Madoff should be enough to give anyone pause.
Clearly 2yro WallStreetBets "analysis"
No bank will allow you to have Robinhood. If they're nice, you can keep an existing account but not trade if you're an SA, but must be liquidated by FT
Have been at 3 BBs and Fidelity is always allowed. TD and Schwab are also usually safe bets. FWIW 2 of my jobs have banned option trading, even fully covered / on ETFs, and the third allowed only very conservative options (think covered calls)
Compliance at my firm gives us a list of brokerages that are acceptable, if you have a preexisting account from a brokerage not on the list, you could ask to keep it during on boarding. Usually the options are pretty limited and trades need preclearance.
Out of curiosity, do any of these online brokerage firms show you your CAGR net of cost for various time periods versus an index? In other words, if you wanted to evaluate your own skill, would you be able to do that? I say that out of pure ignorance because I've never used a firm other than my own for investing
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