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Robinhood Alternatives : 4 Better Platforms for 2020

In this guide, you will discover alternatives to Robinhood which offer regulated and offer wider liquidity and shorter lag times.
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Author: hristina
Last Updated: 08 July 2020

Robinhood rose to prominence as a tool to access the world’s leading stock markets and now counts with over 6 million users who use it daily to trade stocks  without commissions. However, Robinhood has some inconveniences and there are better alternatives out there.

In this guide, we will look at Robinhood alternatives which offer a wider selection of stocks with more favorable spreads and more transparent fees. Read on to find out these alternatives below.

eToro : Best stockbroker for non U.S. countries

OUR RATING

  • Social and copy trading available
  • CySEC & FCA regulated
  • Buy stocks commission-free (other fees may apply)
75% of retail investors lose money when trading CFDs with this provider.

What are Some of the Disadvantages of Robinhood?

Robinhood is one of the fast and intuitive stock trading apps designed for the Millennial stock trader. The Robinhood business model aimed to disrupt traditional brokerages, while also removing fees. In its drive for expansion, Robinhood has brought US stock markets to international investors, exposing them until recently to unprecedented index growth. Robinhood also allows for small-scale stock investments and offers simplified trading, based on its mission to circumvent the usual gatekeepers to stock trading. 

Some of the Robinhood advantages include immediate access and no barriers to buying stocks. Robinhood, as well as similar access points like Revolut, started with the idea that stock trading should be available to anyone, breaking away with the brokerage model. 

However, during the market sell-off in March 2020, Robinhood showed some of its vulnerabilities. The app has encountered issues such as server connectivity problems repeatedly, as well as lags. The app, which is also marketed to offer free stock trading, is also not as transparent as it claims and there are hidden fees and costs on a number of international stocks.

Robinhood’s offerings are limited, and only NYSE and NASDAQ stocks are available, with limitations on foreign-based companies. Outages and incorrect information may also hamper the trading experience. Other drawbacks include:

  • Rudimentary trading tools, which prevent users from tracking more than a handful of stocks and inability to build a diversified portfolio.
  • Server lags and outages reported by users, which may lead to flawed trading.
  • Incorrect pricing information and reports of hidden fees.
  • Lack of international regulations, Robinhood is only regulated by the US Securities and Exchange Commission and is a voluntary FINRA member.
  • Hidden fees and high costs for some international stocks, foreign currency exchanges, and exporting the account to another broker.

There are alternatives to Robinhood, which allow access to financial markets with more agile and liquid platforms. Below, we present some of the best Robinhood alternatives for 2020.

eToro: Best stock trading platform for 2020

Stock trading is one of the mainstream branches of eToro, and one of its most liquid markets. Offers of direct access to stocks are limited to EU-based and UK-based traders, without brokerage fees or commissions when opening and closing a position. Other fees may apply.

Registrations and oversight for eToro stem from the Cyprus Securities and Exchange Commission (CySEC), the British Financial Conduct Authority (FCA), and the Australian Securities and Investments Commission (ASIC). eToro, unlike Robinhood, has a social trading platform that is ideal for beginners as they can copy stock trading portfolios of successful traders and get insights and tips into stock trading on their interactive platform. In comparison, Robinhood is using a minimal interface, which may lead to hasty, overly simplified investment decisions.

eToro is also regulated by CySEC, FCA and ASIC regulatory bodies, which gives users a safer stock trading experience. This gives eToro advantages as an alternative to Robinhood, which is only regulated by US-based rules, and is not registered for compliance with other regional financial rules and regulations.

Demo Account: Yes, for all markets, to get used to a fully functional trading platform.

Educational Material: Yes, eToro has guides to start trading.

Fees: Fees may apply for spreads or lending, but no fees on opening or closing positions.

Minimum deposit: $200; $50 special offer, a minimum of $50 afterward.

Special Features: Stock alternatives such as ETF. Socialized trading and copying trading strategies.

Regulation: Cyprus Securities and Exchange Commission (CySEC), the British Financial Conduct Authority (FCA), and the Australian Securities and Investments Commission (ASIC).

Payment methods: Wire transfer, SEPA transfer, Wire transfer, online banking, instant deposit, Skrill, Neteller, PayPal, Sofort Banking.

OUR RATING

  • Highly regulated
  • Social and copy trading available
  • Paypal accepted
  • Withdrawal fee
75% of retail investors lose capital when trading CFDs with this provider

Plus500: CySEC Regulated CFD Stock Broker

  • Wide variety of stock selections
  • Training materials and demo trading
  • Multiple payment tools
  • Highly risky environment
  • Various fees
  • Requires detailed learning
70% of retail investors lose capital when trading CFDs with this provider.

Libertex: U.S. Friendly Stock Trading App

Libertex is a multi-asset platform with a selective approach to stock trading. The platform picks around 50 stocks and indexes, traded in the form of CFDs. Libertex excludes US and EU-based buyers, but offers a market for third countries. Libertex has been around since 1997, and is also among the least technical applications. Libertex offers a simple trading experience, excluding details about spreads and margins.

Due to its simplicity, Libertex looks like a good alternative to mobile-based app trading. However, the platform does not exclude risk in positions. As of 2020, Libertex offers multi-device trading terminals. Libertex is thus more agile in adding international stocks, and runs a transparent fee schedule for most assets. Robinhood, on the other hand, has extraordinary fees for some stock purchases.

Demo Account: Yes.

Educational Material: No

Fees: Varied by asset

Minimum deposit: $100 or 100 currency units, depending on the market.

Special Features: US blue-chip stocks and volatile international stocks on offer.

Regulation: CySEC license.

Payment methods: SEPA bank transfer, wire transfer, Skrill, Neteller, Sofort, Giropay, Trustly, iDEAL, Przelewy, MB, Rapid, TeleIngreso, Neosurf.

  • International presence
  • Tailored stock selection
  • Multiple payment tools
  • Risky assets
  • Not available for US buyers

Alternative 4: Forex.com

Forex.com offers an alternative to investing in stocks and equities. A Forex.com account as an alternative to Robinhood gives access to a multi-platform trading opportunity. The platform has been around since 2001, preceding Robinhood by more than a decade and becoming highly experienced in offering a varied, international experience in stock and index trading. The platform is legalized in multiple countries. Its parent company, GAIN Capital Holdings, is also publicly traded.

Forex.com offers access to 4,500 stocks worldwide, with a special focus on large international companies, and low spreads on UK stocks.

Demo Account: Yes.

Educational Material: Limited.

Fees: Position fees, rollover, and commissions may apply depending on the type of account.

Minimum deposit: $100

Special Features: Access to international companies, positions in a wider selection of stocks.

Regulation: FCA, Investment Industry Regulatory Organization of Canada (IIROC), Financial Services Authority (FSA) Japan, ASIC, US Commodity Futures Trading Commission (CFTC), Cayman Islands Monetary Authority (CIMA).

Payment methods: Credit or debit card, wire transfer.

OUR RATING

  • Access for US traders
  • Wide selection of stocks
  • Risky trading environment

How We Analysed the Best Robinhood Alternatives

We looked at platforms offering a service similar to Robinhood, though with more robust characteristics. Our analysis hinges on the concept that the most popular platforms may not be ideal for all traders and that alternatives can offer better experiences and expose traders to various types of risk. Low-fee competition has led some platforms to become formidable in offering easier access to stocks without the need for a brokerage account.

  • Safety and regulation: We looked at registrations and limitations to trading, to offer only those platforms that satisfied the conditions of various national agencies of financial and trading oversight.
  • Trading volume: We looked at the potential pool of traders. Coincidentally, eToro and Robinhood both boast 3 million users, and for most online platforms, a million users are not off the mark. But trading experience and frequency also matter.
  • Usability: Robinhood has significant usability advantages, but older platforms also offer powerful trading tools. 
  • Supported stock markets: Supported stocks may make a difference when it comes to selecting which market risks are the most promising.
  • Fees: Currently, eToro holds the lead on low fees, but most big platforms attempt to be competitive in their fee schedules.

Robinhood Alternatives – Final Thoughts

Robinhood is one of the most emotionally appealing tools to simply grab stocks. But other platforms offer advantages in education, as well as wider functionalities. Stock trading and CFDs trading always poses risks

Mobile apps may be one of the most appealing points of access. But beyond user experience, trading may be possible through other platforms. Trading restrictions vary by platform, and it is possible to discover the best tool. Educational and training features are an important part of the mix in competing for the best trading environment.

From our analysis, eToro has emerged as one of the leaders in becoming an alternative to Robinhood. The availability in multiple markets, while being a fully regulated and transparent platform, means eToro offers a legal and safe approach to retail investments.

eToro : Best stockbroker for non U.S. countries

OUR RATING

  • Social and copy trading available
  • CySEC & FCA regulated
  • Buy stocks commission-free (other fees may apply)
75% of retail investors lose money when trading CFDs with this provider.

FAQs

Are there any sites like Robinhood?

There are multiple apps attempting to copy the success of Robinhood. But platforms that established their presence are also available, and remain robust venues for retail stock trading.

Are there alternatives to Robinhood with lower fees?

Fee schedules may vary by provider, but in general, sites like eToro offer significantly lower fees, waiving commissions and brokerage fees.

Is Robinhood risky?

Robinhood is considered somewhat risky, due to the inherent problems of retail trading against specialized professional traders.

What are the advantages of more complex trading platforms?

Platforms like eToro offer socialized trading, and the possibility to copy strategies. Robinhood and other apps for trading possibly allow for emotion-driven trading and rushed decisions. Educational materials and a trading community offer extra knowledge and potential protection.

What stock markets promise retail access?

Using Robinhood means exposure to US-based companies and stock risk. Other platforms may offer a wider selection of stocks and exchanges, with exposure both to Western businesses, but also promising international stocks from third countries.

How risky is retail stock trading?

More than 70% of traders lose funds on their investment. Stock trading is inherently risky and subject to limitations. Using both Robinhood or other platforms can lead to potential losses.

Remember, all trading carries risk. Past performance is no guarantee of future results.
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