FWIW: In the very beginning , I used RobinHood, for some of my trades. I now have 3 different I go through, so all my eggs would not be in one basket.
I had concern about RH, and where my shares were being held, I sent them a letter, and this is the response I got, hope this helps some of you that are using RH, I think we going to be A-OK!
Thank you for your patience. Matt with the Advanced Brokerage team here.
We realize there’s some confusing information being shared about how we help our customers invest and we’d love to clarify how that actually works. To be clear, you do own the shares you buy through Robinhood.
Here are some important points to know:
You own the shares you buy through Robinhood as soon as your order is executed. Period.
No, we don’t engage in contract for difference (CFD) trading, which is a type of forex trading. Robinhood Securities is a clearing broker dealer, not a market maker, and we don’t sell shares short.
Downgrading from a margin to a cash account won’t impact your ownership or the price of the shares you hold, nor will transferring your shares to another brokerage.
The bid-ask spread is determined by the national best bid and offer (NBBO). Neither we nor the market makers have the ability to set the spread — the best prices available on all market venues combined set the spread. We are required to route market orders immediately for execution and the orders our customers enter, combined with the orders of all investors and market participants, determine how wide the spread is at any given time.
As well, Robinhood Financial is an SEC Registered Broker Dealer and a member of the Financial Industry Regulatory Authority (FINRA). For more information on Robinhood Financial, visit FINRA Broker Check.
Robinhood Financial is a member of SIPC, which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash). An explanatory brochure is available upon request, or on the SIPC website.
For more information, check out our Help Center.
We encourage you to read the blog post, and if you have additional questions, reach out.
Have a great day, Rick!