Alternatives To Robinhood

Consumer faith in the Robinhood platform was dashed at the end of January 2021, after the company suspended trading in cryptos and GameStop shares. Follow the events that led to the broker losing favour with day traders and see our recommended alternatives to Robinhood.

WallStreetBets & GameStop

Buoyed by insider knowledge that Wall Street hedge funds had millions in short positions on the high street gaming retailer, Redditors jumped to purchase shares in the firm earlier this week, causing a surge in the value of stocks.

In reaction, Robinhood suspended trade on GameStop shares to comply with ‘financial requirements’ the platform’s CEO Vlad Tenev confirmed.

Whilst heavily restricted, trade has now resumed after the firm raised $1 billion in emergency investment. But the damage to consumer confidence still remains.

Angry investors posted a barrage of 1-star reviews for the app on the Google Play Store. These have recently been deleted by Google, returning Robinhood’s average star rating to four.

Crypto Trading Suspended

In the wake of the volatility, other markets have also seen disruption.

Gold prices declined 0.2% and UK short positions in Cineworld and Pearson were also impacted. However, it was cryptos that saw volatility in particular.

The price of dogecoin, a relatively unknown crypto, soared by 800% after it gained traction on social media.

The spike in price and market activity led to Robinhood suspending instant cryptocurrency deposits on Friday, citing ‘extraordinary market conditions’.

For the second time in one week, the broker acted as a barrier between its customers and the financial markets. It was perhaps unsurprising then that loyal day traders were once again up in arms.

Alternatives To Robinhood

Following an eventful week, retail day trader interest has quickly turned to alternatives to Robinhood. Competitor brokerages that offer stock trading and options are seeing a pique in new accounts.

eToro

Top alternatives to Robinhood include eToro, a social trading platform that offers trading in stocks, cryptocurrencies and CFDs. Clients can utilise social feeds to discuss strategies and copy positions. 50+ currencies, nearly 1,000 stocks and a portfolio of indices are also available.

In addition, the broker provides its own powerful trading platform with extensive customisation and a user-friendly dashboard.

Forex.com

Forex.com is one of the top rated online brokers offering access to over 180 global markets. Leveraged trading is available on forex, stocks, commodities and cryptos.

The broker also offers multiple live account options, competitive floating spreads and a choice of flexible deposit and withdrawal options.

Add in daily market updates and approval from a long list of respected regulators and it’s unsurprising Forex.com is a popular alternative to Robinhood.

Pepperstone

For those with an interest in forex trading, Pepperstone offers trading on six major currency pairs, as well as numerous minors, crosses and exotics.

CFDs are available on major instruments such as indices, commodities and shares. Australian-based Pepperstone also provides the leading MT4 and MT5 platforms, alongside a competitive £200 minimum deposit requirement to meet the needs of novice traders.

Final Word

The GameStop and crypto disruption has proven the volatility of financial markets and the risks involved. The reaction of Robinhood has also shown that not all brokers will respond how customers would expect. As a result, many traders will look for alternatives to Robinhood.

Fortunately, there are many top brokers available in today’s market.