Investing With Robinhood Made Easy
Updated: Oct 2, 2022
The everlasting questions asked by people who want to start investing:
"How do I start investing?"
"How do I open a brokerage account?"
"How do I buy and sell stocks?"
These very simple questions will all be answered in this blog so you no longer have to worry about how to start investing!
For brokerage of choice, we have Robinhood. Very easy to use and includes all the features you need to start investing. Guidelines will be provided on how to set up an account and perform actions on the platform. Let's dive in.
*Disclosure: Tasci Finance only recommends products and services I would use myself or are currently using. This post may contain affiliate links that at no additional cost to you, I may earn a small commission.
To follow along use this link -> https://join.robinhood.com/johnt1745
Both you and I receive a free stock when you complete sign-up!
Opening Account
Individual Requirements
Be 18 years or older;
Have a valid Social Security Number (not a Taxpayer Identification Number);
Have a legal U.S. residential address within the 50 states or Puerto Rico (they may make exceptions for active U.S. military personnel stationed abroad)
Be a U.S. citizen, U.S. permanent resident, or have a valid U.S. visa
The account holder must be 18 years or older, but that doesn't mean the person that has access to the account must be 18 or older. Unfortunately, Robinhood doesn't have a custodial account (joint account for parent and minor). So to fight this issue, you should have a parent or guardian make the account with you managing the account with your own money.
Linking Your Bank Account
Now you need to link your bank account. It is recommended to link a checking account rather than a savings account to avoid potential transfer fees.
If you do business with major banks then it will be easy to set up.
App
To link a major bank in your iOS or Android app:
1. Tap the Account icon in the bottom right corner.
2. Tap Transfers.
3. Tap Linked Accounts.
4. Tap Add New Account.
5. Choose your bank from the list of major banks, or use the search bar to search for your bank.
6. Enter your online banking username and password.
7. Choose which account you'd like to link.
Website
To link a major bank in your web app:
1. Click Account in the upper right corner of the screen.
2. Click Banking.
3. Click Add New Account under Linked Accounts.
4. Choose your bank from the list of major banks, or use the search bar to search for your bank.
5. Enter your online banking username and password.
6. Choose which account you'd like to link.
If you don’t see your bank or credit union listed, you’ll need to verify your account manually.
App
To link a non-listed bank or credit union in your iOS or Android app:
1. Tap the Account icon in the bottom right corner.
2. Tap Transfers.
3. Tap Linked Accounts.
4. Tap Add New Account.
5. Scroll down and tap More Banks.
6. Type in your bank.
7. If you don't see it, tap I don't see my bank.
8. Select checking or savings.
9. Enter your routing and account number.
Website
To link a non-listed bank or credit union in your web app:
1. Click Account in the upper right corner of the screen.
2. Click Banking.
3. Click Add New Account under Linked Accounts.
4. Search for your bank.
5. Click I don’t see my bank.
6. Enter your account information.
Once you’ve submitted your information, Robinhood will initiate two micro deposits to your bank account. It may take up to 48 hours for the transfers to appear in your bank account.
Once the two small transfers have landed in your bank account, verify them in your mobile app:
1. Tap the Account icon in the bottom right corner.
2. Tap Transfers.
3. Tap Linked Accounts.
4. Tap Verify.
5. Enter the two deposit amounts.
6. Tap Enter.
Depositing Money Into Robinhood
To initiate a deposit in the mobile app (iOS and Android):
Tap the Account tab (person icon) in the bottom right corner (if you’re an Android user, tap the Menu icon in the top right corner)
Tap Transfers
Tap Transfer to Robinhood
Choose the account you’d like to transfer from
Enter the deposit
Review the deposit
Submit the deposit
To initiate a deposit on the web:
Click Account in the upper right corner of the screen
Click Banking
Choose the account you’d like to transfer from on the panel labeled Transfers (right side of the screen)
Enter the deposit amount
Click Review
Click Submit
Buying / Selling Stock
The easiest part is buying and selling stocks.
All you have to do to buy stocks is to search up the stock name click "buy" and you'll be represented with many options.
Buy in Dollars - Buy stock in dollar amounts starting at $1
Buy in Shares - Buy stock in shares starting at 0.000001
Recurring Investment - Invest in stock on a recurring schedule
Limit Order - Buy stock at a maximum price or lower
Trailing Stop Order - If the stock rises above its lowest price by a specific amount, triggering a buy order.
Stop Order - If stock rises to a fixed stop price, trigger a buy order.
Stop Limit Order - if the stock rises to a fixed stop price, trigger a limit buy
Very simple actions you fill out what's asked of you and your investment journey starts!
Buying / Selling Crypto
Cryptocurrencies are also easy to buy and sell but hold less options.
Buy in USD - Buy crypto in dollar amounts, starting at $0.05
Buy in Crypto - Buy crypto in coin amounts starting at 0.000001
Recurring Investment - Buy crypto on a recurring schedule
Limit Order - Buy crypto at a maximum price or lower
Easy enough!
Buying / Selling Options
Step by Step Buying Options:
Click stock
Click trade
Click trade options
Click buy
Choose between put or call
Click on the contract you want to buy
Click buy button
Type in the number of contracts and how much you would like to pay for each option.
Same steps for selling call but for step 4 change buy to sell.
Robinhood Gold Features
The main features of Robinhood Gold:
Bigger Instant Deposits (only available if your Instant Deposits status is in good standing)
Professional Research from MorningStar
Level II market data from Nasdaq
Access to Margin Investing (not available for everyone)
You can try Gold for free for the first 30 days (the $5 monthly fee will be waived). If you choose to use margin investing during your trial period, you’ll still be charged 2.5% (can change) yearly interest on any amount you borrow over $1,000.
You can upgrade to Robinhood on any platform. Click on profile and you'll see "upgrade to gold" as an option and it's very easy to be enrolled. If you no longer need the membership, you can unenroll anytime.
Rolling Options (new)
What's option rolling?
Rolling is when you close a current option contract and simultaneously buy a new contract typically with an expiration further out and a different strike price.
Keep in mind rolling involves closing an existing position and realizing gains or losses, while also opening a new position. This will result in capital gain or loss so be aware of that to be ready to pay taxes.
Different Ways To Roll
Rolling Out
Rolling out an option involves closing an existing options position while simultaneously opening a new one with the same strike price, but with an expiration date further out in time.
Rolling Up
Rolling up an option involves closing an existing options position while simultaneously opening a new one with the same expiration, but at a higher strike price.
Roll Down
Rolling down an option involves closing an existing options position while simultaneously opening a new one with the same expiration, but at a lower strike price.
Rolling up/down and out
An options roll that involves rolling your strike price up or down and out to a further expiration involves closing an existing options position and choosing a new strike and a new expiration further out in time.
How to roll an option on the app
You can access rolling for your existing options by selecting Trade > Roll Position > Select New Position. That's all!
Creating a brokerage account and using their tools is very easy. Choosing the best investments is not easy. Now that you know everything to start an account on Robinhood you have no excuse but to start now!
Create your own account and receive a free stock -> https://join.robinhood.com/johnt1745