Did Robinhood’s Clever Design Make Trading Too Easy?
With its ease of use and sleek look, the commission-free app has some critics worrying that retail traders just won’t know when to stop.
Robinhood’s commission-free app made trading stocks a pandemic pastime for homebound Americans looking for something to do. Almost overnight, it seemed that day trading went from being a hobby you once heard about to a force of nature, with retail traders even bringing some hedge funds to their knees earlier this year.
But critics contend apps like Robinhood are making trading too easy for everyday people without the financial background to know what they’re doing—or at least when to stop. Moreover, the way Robinhood makes money depends in large part on how many trades its users make. Now the U.S. Securities and Exchange Commission is getting involved.