Tread carefully, Robinhood day trading resembles casino gambling – Wall Street Journal

Day traders can be likened to people gambling at a casino. Those who trade infrequently may come out ahead and have some sort of edge when they do trade, while those who indulge themselves with frequent trading often find that they lose this edge as daily trading serves only to increase their costs and risks. In other words, winners know when to stop. In a Brazilian study, researchers found that the declining probability of winning, which is evident in casino gambling, is also evident in day trading. Robinhood is a streamlined trading brokerage that has gained serious traction for bringing online day trading to the masses through its free app. When Robinhood came on the scene in 2012, it introduced a platform that didn't charge commissions. On top of that, anybody who joined got a free stock. With the implementation of national lockdowns earlier this year because of the coronavirus pandemic, boredom and the desire to make quick money greatly escalated the appeal of day trading. In June, Alex Kearns, a 20 year old American student, committed suicide as a result of his day trading activities. This tragedy serves as a reminder to tread carefully, no matter how alluring and easy the process of day trading has become. – Nadya Swart

Confetti. Free stocks. Does Robinhood's design make trading too easy?

By Michael Wursthorn and Euirim Choi

Few brokerage apps have captured people's attention like Robinhood Markets Inc. The Silicon Valley company has turned the complex process of trading stocks into a simple, free swipe across a screen.

___STEADY_PAYWALL___