Robinhood Recaps From a Volatile Year

“This year included an unprecedented surge in retail investing,” the Robinhood spokesman wrote. “We welcomed millions of new customers to Robinhood, about half of whom were investing for the first time. With Robinhood Recap, we sought to remind both new and longtime customers about their investing journey.”

Robinhood added three million users this year, bringing its total to 13 million. The app has become a favorite of young and inexperienced investors, enticed by no-fee trading, offers of free stocks and an engaging user interface that uses what a New York Times report in July described as the “Silicon Valley playbook of behavioral nudges and push notifications.”

The Times article stated that Robinhood’s users trade risky products at a faster pace than clients of major brokerage firms; for example, Robinhood users bought and sold 88 times as many risky options contracts as Charles Schwab clients did.

Several people said that the recap seems to fit into the company’s broader strategy of positioning itself as a lifestyle experience, rather than just another boring trading platform, in order to appeal to investors who are less sophisticated.

“Their bright and colorful U.I., the ease of access to opening margin accounts and access to options, and now Robinhood Recap give me an idea that they’re trying to appeal to younger people,” Luke Thornburg, 19, wrote in an email. “These younger people who are generally inexperienced and more risk-tolerant might choose Robinhood because of these things.” He said that he had lost money on risky options trading when he first began using the app.

“Spotify seems to be the clear kind of comparison there,” said Mr. Bishop, the founder of a personal finance website focused on air travel. “I just find it fascinating, and a little dangerous, how, you know, personal finance and social media are blending together in this way.”

Article source: https://www.nytimes.com/2020/12/24/style/robinhood-2020-recaps.html