Blain’s note: If Robinhood is spending development resources and executive time to provide new customers the ability to jump into the markets without having to wait the three day funding period, what does that say about the customer base as a whole? It seems to me Robinhood is attracting smaller portfolios from over eager young investors who are new to the market and have one goal: jump in and gamble. This also opens the door to foul play from customers seeking to exploit the system. I have trouble seeing how this new program supports the goal of attracting sustainable accounts with sizable portfolios. Lot’s of hype, and a lot to deliver. One thing is for sure, the company certainly has enough cash to give it a try.
Robinhood has introducted Robinhood Instant. What is it all about? The primary function of Robinhood Instant is to allow users instant access to deposits as well as immediate access to funds after selling stocks. In the past, there was a three day wait time both after a deposit was made and after a stock was sold. This was in a category called “unsettled funds” in the Robinhood App in the past.
Robinhood Instant is part of an upgrade to the overall app. Basically, Robinhood is fronting new users $1,000 to trade with while their deposit clears. This will be in the form of a short term credit while the transfer from the bank is processing.
While the app is totally free, there is a bit of a catch here. There is a wait list for Robinhood Instant. How do you get access? By referring friends through your own unique link that Robinhood provides. A Robinhood representative said this week, “The more friends who create accounts with your link, the sooner you will receive Instant.”
Both being able to trade quicker after depositing and not having to wait after getting out of a position are definitely bringing more interest to the Robinhood App. Within a day of this news, more than 70,000 have gotten on the Robinhood Instant waitlist.
The full blog post from Robinhood about Instant can be found here.