How to Use Robinhood: A Complete Guide to Trading on the Investing App

If you are an investor — new or experienced — you have almost certainly heard of Robinhood. The app-based investing company, which currently has more than 27 million customers and over $324 billion assets on its platform, is popular among retail investors who congregate in online forums like Reddit's r/WallStreetBets.

Robinhood launched in 2013 and grew its following amid an influx of everyday traders and the cryptocurrency boom during the COVID-19 pandemic. It offers commission-free trading, meaning users can invest in everything from shares of Tesla and stock options to exchange-traded funds (ETFs) and Dogecoin without going through traditional brokerages or crypto exchanges.

The company went public in July 2021, trading on the Nasdaq under the ticker symbol HOOD. Since then, the Menlo Park, Calif.-based firm has grown into a financial powerhouse. The brokerage has since launched retirement saving accounts, broadened its futures and options offerings, introduced credit cards and private banking services in addition to having teamed up with mortgage lenders.

In late 2025, the company also announced a predictions market hub that allows customers to wager on the outcomes of sporting events, elections, entertainment awards shows and more.

Here is everything you need to know about the trendy (and controversial) trading app — including how to trade on its app-based platform.

Who uses Robinhood?

The Robinhood app is popular among young and novice investors. It has been known to target younger investors specifically, from offering college students $15 to trade if they opened a new account and offering fractional shares and alternative assets like crypto.

Robinhood isn't limited to Redditors with higher risk appetites, though. The app can serve as a good introduction to investing for those interested in doing their research. The company has also added a slew of features that may appeal to investors who are not new to financial markets, as well as those who are looking to save for long-term goals such as buying a home or retirement.

The company offers an individual retirement account that, under certain conditions, features a 3% match. That is available to Robinhood Gold subscribers, who pay a $5 per month fee. Robinhood's IRA match is similar to employer-sponsored retirement plan matches, as seen with many 401(k)s.

In 2025, the company reported that its median customer age was 35: Gen Alpha and Gen Z users make up 24% of customers, and millennials make up 50%. Generation X makes up 20% of the customer base and Baby Boomers and older account for 6%.

How to open an account on Robinhood

To open an account on Robinhood, you'll need to go to the website or download the app. Users must be at least 18 years of age, have a valid Social Security number, have a residential address within the United States and be a U.S. citizen, U.S. permanent resident or have a valid U.S. visa.

You will have to start with opening a self-directed, taxable, individual investing account, though once you have done that you can also open a joint investing account or retirement account. The first step is to submit an application. You will then receive an email "in the coming days" — per the company's website — that will inform you about whether your application has been approved or if the brokerage needs additional information. Robinhood may ask for a document to verify your identify.

Now, it is time to fund your account. You can link an external bank account and initiate a transfer, which could take up to four days from a standard bank account.

How to invest on Robinhood

Robinhood now offers a wide variety of investable options for users to choose from. But many will stick with a traditional asset class that generates some of the highest long-term returns: stocks.

Once you've funded your Robinhood account, you're ready to buy equities (e.g., stocks and ETFs). You can opt for individual stocks, with the top stocks on the app as of March 2026 including Tesla, Nvidia, Google, Apple, Amazon, Microsoft, Netflix, Meta, Ford Motors and Palantir Technologies. Or you can choose from funds such as the Vanguard S&P 500 ETF — the world's largest ETF — which offers investors exposure to around 500 of the largest publicly traded U.S. companies.

You can select the ticker symbol then input either how many shares you want to buy or the dollar amount you want to invest in the stock or ETF. If you are trading during regular market hours, the default transaction will be a market order, which generally means you are willing to accept the next available price and quickly execute the trade.

You can change this if you prefer a different type of trade. Generally, if you buy during extended hours, the transaction will be a limit order, which means you'll specify the price at which the order can be executed. These types of orders are not guaranteed to execute, but they give you more control over the price you pay.

If you have a Robinhood Crypto account, you can typically trade crypto 24/7. The trading app supports a wide variety of coins and tokens, including bitcoin, ether, litecoin and cardano. However, unlike fee-free equity trading, fees for crypto trading range from 0.03% to 0.85%.

As previously mentioned, Robinhood also offers futures trading and has introduced prediction markets, the latter of which entail contracts that cost less than $1. According to Robinhood, you will earn $1 per contract if your prediction is correct, and $0 if it is not.

How to use Robinhood (the right way)

Pouring money into artificial intelligence stocks and other speculative companies that are soaring may be tempting, but no matter how savvy you are at picking stocks, you are highly unlikely to beat the market over the long term. That is why Money has always recommended that new investors start with passively-managed index funds with proven track records instead. That approach is one of the most likely (yet boring) ways to become a millionaire.

The truth is, there is no crystal ball predicting where the stock market will go next. Day traders will often try to game the system — despite the fact that beating the market using the strategy is next to impossible. And since Robinhood allows anyone with a bank account to buy and sell risky financial products, such as options, its appeal is no surprise.

Before you download any sort of investing app, establish what your motivation is. Are you doing this to make some quick cash? Because you have Reddit-induced FOMO? Or because you want to put your money to work responsibly and are prepared to think about long-term strategies?

If you approach investing through a financial planning lens, make sure you've first paid off all your credit card and high-rate consumer debt. You should also be contributing enough to your employer-sponsored plan to maximize any potential match benefit — that is an immediate, guaranteed return on your investment that you cannot expect from the stock market.

If you are new to investing, start with a small amount of money you are OK with losing, and stick to stocks and ETFs. Thanks to fractional shares, you can start investing with just a few dollars. Say you have $10 you would like to invest in Apple. Shares of the Magnificent Seven stock are trading for more than $250 as of early March, so $10 will not get you a single share. But you can buy a fraction of a share worth $10.

"One of the main benefits of a platform like Robinhood is that you can purchase fractional shares," says Anjali Jariwala, a certified financial planner and founder of FIT Advisors. "This is a great way to purchase different stocks, learn about investing and build wealth."

You can also use a stock market simulator to create a "practice portfolio," which will help you learn how the market fluctuates over time, and how to make healthy investing habits (like not checking your account numerous times a day). In other words: Learn to walk before you run, and take the time to understand what you are actually buying and selling.

Jariwala recommends that new investors steer clear of trading options, futures and crypto, since doing so can be complex, risky and highly speculative.

"You can lose money very quickly if you are not familiar with how these strategies work," she says, adding that if you are interested in these investment vehicles, you should learn about them first and start with a very small amount of money to get familiar with the strategy.

"In my opinion, the best way to build wealth is automate and forget about it. Set up automatic transfers to your investment account and have it invest automatically in diversified ETFs," Jariwala says. "It requires little management and the auto-investing feature puts money into the market for you. You will be surprised how quickly that money grows over time."

Robinhood has faced scrutiny

Despite its surging popularity, Robinhood has had its fair share of criticism. In December 2020, the company was fined $65 million by the U.S. Securities and Exchange Commission (SEC) for allegedly misleading customers about one of its revenue sources. (Robinhood uses a practice called "payment order flow," in which a brokerage firm sends customer orders to high-speed trading firms in return for cash payments).

In June 2021, the company faced the largest financial penalty ever issued by the Financial Industry Regulatory Authority (FINRA), agreeing to pay $70 million for various regulatory allegations, including system outages, misleading users and allowing customers to trade options — a risky investing move — when it was not appropriate to do so.

In early 2021, Robinhood curtailed users' ability to trade certain meme stocks like GameStop and AMC, generating the wrath of U.S. traders and lawmakers. Then in 2025, Robinhood agreed to pay $45 million to settle SEC charges related to violations including failure to timely investigate suspicious transactions and implement adequate identity theft protection policies.

Also last year, FINRA ordered Robinhood to pay $3.75 million to customers who it says the company provided with inaccurate or incomplete disclosures around a practice called "collaring," and fined the company another $26 million for violating several rules including failure to establish and implement an anti-money laundering program.

This story has been updated to ensure the information regarding Robinhood's offers and features is up to date as of March 6, 2025.

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