Robinhood stock trading app confirms $110M raise at $1.3B valuation
<i>“But ‘how are you going to make money long-term?’ has been a question mark” Bhatt says. Gold has answered that question.” A Gold subscription lets users borrow up to double the money in their account to trade on margin with leverage</i><p>Wow, so that&#x27;s effectively opening up new easy to get credit vehicles for unsophisticated investors. How could that go wrong?<p>Even if you are a professional trader you&#x27;ll take a bath on margin over the long run. They are incentivizing what is effectively borrowing for gambling and that is their long term revenue strategy? Might be a great money maker but it certainly is playing with some really big barrels of fire.<p>&quot;Three things ruin people: drugs, liquor, and leverage - Charlie Munger&quot;<p>edit: The point here is not that Margin is a new service, yes every brokerage has it, it&#x27;s that it is irresponsible to use Margin if you are not a sophisticated investor. Its even more irresponsible to push leverage onto unsophisticated investors.<p>Not everyone is going to understand the risks of leverage and if Robinhood makes it as easy as candy crush to trade on leverage, enough gamified users are &quot;playing&quot; stock market with real money and a margin call happens during a huge downturn, it will be exceptionally nasty.