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15 votes
Accepted

Robinhood, daily buying and selling, and cryptocurrencies... What tax concepts to expect?

Robinhood (like other brokers in the US) will produce a Consolidated Form 1099 for your use in filing taxes. They will show all the individual trades (that have tax implications), as well as provide a ...
Hart CO's user avatar
  • 70.5k
14 votes
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How does Robinhood’s cash sweep achieve 4% interest?

I opened an 11-month CD yesterday at 5% with Capital One, and rates were over 4% on all longer terms. If individuals have fixed rate options >4% then it makes sense that there are some variable ...
Hart CO's user avatar
  • 70.5k
9 votes
Accepted

Is my cash safe with Robinhood banking?

Your money is likely not insured as the SIPC said that the accounts they insure are not meant to hold cash strictly for savings. Cash balances sitting in accounts collecting interest for a long ...
user1723699's user avatar
  • 2,113
9 votes
Accepted

Why is Robinhood a second rate stock broker?

Robinhood had a perceived an edge when they were one of the few brokers that didn’t charge commissions. I say perceived edge because they have many deficiencies. Until recently they didn't pay ...
Bob Baerker's user avatar
  • 76.7k
8 votes

How does Robinhood’s cash sweep achieve 4% interest?

Even if they're not really taking any risk, the one-month US treasury yield is currently around 4.6%. I think banks can treat these as effectively-cash and it's trivial to buy and sell them, so it ...
Brendan Long's user avatar
7 votes
Accepted

Discrepancy in P/E ratio of stocks in Robinhood app?

The EPS of Amazon for the last quarter of 2018 was $6.05. However, the P/E ratio is calculated using an annual number for earnings. Amazon’s earnings for 2018 was $20.14. (Source) $1673 / $20.14 = 83....
Ben Miller's user avatar
  • 116k
6 votes

What will happen if Robinhood / M1 Finance gets acquired or pivot?

Robinhood is fine for the small investor who wants to minimize the effect of commissions (elsewhere) on a small portfolio and whose needs are minimal, if not absent (research, charting, fast execution ...
Bob Baerker's user avatar
  • 76.7k
6 votes

"Break even" price on call options is lower than current stock price?

If those are the respective real time quotes then yes, you could do a Discount Arbitrage (buy call, exercise call to acquire stock, and sell stock. To avoid slippage, you'd buy a Synthetic Put via a ...
Bob Baerker's user avatar
  • 76.7k
6 votes
Accepted

Insider Trading as Low Level Employee as Shown in Robinhood Commercial

I don't think the commercial describes insider trading. For a large corporation, the amount of inventory on the shelves in the stockroom in one location isn't insider information. It tells you nothing ...
mhoran_psprep's user avatar
6 votes
Accepted

Will I pay taxes twice if I move from eTrade to another platform?

Never sell stocks then buy. You transfer shares Any competent trading platform should allow you to transfer stock shares to another platform directly. That way a sell and buy does not occur, you do ...
Harper - Reinstate Monica's user avatar
5 votes
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Robinhood does not provide all information necessary to fill out 1099

If you receive a 1099 Form with all zeroes, treat it like you never got the Form and don’t need it. And if you are entering a form you have received into the tax software, it is okay to leave cells ...
Ben Miller's user avatar
  • 116k
4 votes
Accepted

Understanding on closing an option

The statement by Robinhood that "if the contract is about to expire and is out of the money, they will automatically sell it back in the market so I don't lose all of it" makes no sense at all. Only ...
Bob Baerker's user avatar
  • 76.7k
4 votes
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Robinhood Reg T Call, please explain

Regulation T requires that at least 50% of the money you are trading with be your money. If you fail to meet this requirement, stocks will be sold to both reduce what you're borrowing and increase ...
David Schwartz's user avatar
4 votes
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Robinhood covered calls

When you write (sell) an option, you must be covered or you must put up margin. For margin purposes, covered means that you: Own the underlying stock Own a call with same or lower ...
Bob Baerker's user avatar
  • 76.7k
4 votes

What will happen if Robinhood / M1 Finance gets acquired or pivot?

Personally, I have no idea why anyone would trust Robinhood for their brokerage account. I understand that people (probably young people) think an "investing app" is a thing and that may appeal to ...
quid's user avatar
  • 49k
4 votes

Is my cash safe with Robinhood banking?

Obviously the news has fleshed out a little bit but it might be worth simply examining things from a high level. When you send $100 to your bank, it goes in your bank's balance sheet and the bank ...
quid's user avatar
  • 49k
4 votes
Accepted

Why can’t I seem to purchase this option?

The current price is $2.11 per share, the strike price on the call option is $0.50, and you're placing a bid for the option for $0.15 per share? You'll never get it at that price. The reason for this ...
Tanner Swett's user avatar
  • 3,427
4 votes

FDIC vs SIPC on Robinhood

SIPC also protects cash, not just securities. Your cash is still insured. From https://www.sipc.org/for-investors/what-sipc-protects SIPC protects against the loss of cash and securities – such as ...
ceejayoz's user avatar
  • 2,564
4 votes
Accepted

If I am buying a stock why don't just I buy an in the money option?

The reason that it is recommended not to hold long options until expiration is that option premium decay is non linear. It speeds up every day, faster and faster as expiration approaches. The reason ...
Bob Baerker's user avatar
  • 76.7k
4 votes

What is the difference between buying stock in Shares VS Dollars?

It is two slightly different ways of specifying how much you want to buy when placing a market order (i.e. one that is satisfied at whatever the current price is). For simplicity, I'm assuming there's ...
TripeHound's user avatar
  • 9,171
3 votes
Accepted

As a short term trader, do I personally have to keep track of every wash sale for tax purposes?

If all of your transactions are in the same tax year there is zero difference in outcome. Basic accounting with no wash sale yields a net $1 gain: Transaction 1 Transaction 2 Buy $10 ...
quid's user avatar
  • 49k
3 votes

Why won't my pending dividends show up in Robinhood account?

BP goes ex-dividend for tomorrow for 61 cents. The payment date is June 21st. Every broker I have used offers a look up feature to check the Declaration, Ex-div, Record and Payment dates for ...
Bob Baerker's user avatar
  • 76.7k
3 votes
Accepted

What is a stock down from when it "is down"?

First, trading stocks is inherently risky. If you would be in trouble financially should you lose everything, you should reconsider why you are trading and how much you are investing. Alright, onto ...
Michael Hartmann's user avatar
3 votes
Accepted

If I buy and sell a zero commission stock, would I lose any money?

Take note, Robinhood also uses a fuzzy pricing model. The quote you see and purchase the stock at is not necessarily what the market has on its books at that exact moment. Robinhood can opt to buy/...
Shorlan's user avatar
  • 532
3 votes
Accepted

Size limit on option buying and selling

That is an in house rule at Robinhood. CBOE Position Limits are typically in the 25,000 to 250,000 contracts depending on the capitalization of the underlying, the number of outstanding shares and ...
Bob Baerker's user avatar
  • 76.7k
3 votes

Will I pay taxes twice if I move from eTrade to another platform?

You might pay taxes "twice" if you have gains after selling both times. You're already paid the income taxes for the vested shares, but if the stocks have gained value since you were vested then you'...
D Stanley's user avatar
  • 136k
3 votes

Advice for an 18 year old about Investing?

I'd highly recommend reading JL Collin's Stock Series. This is a great resource to teach you about how investing works, and gives you a primer on index funds, stock and bonds. Aditionally (and most ...
Dugan 's user avatar
  • 2,582
3 votes

Robinhood - should I expect to receive a tax document?

From a Robinhood FAQ You’ll only receive a 1099 tax document from Robinhood if the proceeds from dividends exceed $10, the value of referral stock grants exceed $600, or you sell a position. If you ...
Nosjack's user avatar
  • 8,697
3 votes

How much are fees on ETFs on Robinhood? Where are they shown?

Think of an ETF company like any other company, they have employees and offer some good/service to the consuming public. The service is managing the ETF(s) and they charge a fee for that service to ...
Hart CO's user avatar
  • 70.5k
3 votes

How much are fees on ETFs on Robinhood? Where are they shown?

When you're looking at the expense ratio of a fund, that "expense" is not from the broker but from the fund itself. Meaning if the value of the constituents of the fund rises 10% in one year ...
D Stanley's user avatar
  • 136k

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