Vladimir Tenev and Baiju Bhatt founded Robinhood with the goal of making market access cheaper and simpler for everyday investors. The company’s early pitch centered on mobile-first investing and removing traditional barriers like per-trade commissions.
Robinhood announced it was available to the public on iPhone, promising “commission-free” trading and no account minimums. This launch helped popularize the idea that stock trading could be an app-based, low-cost consumer product rather than a premium service.
Robinhood announced the rollout of commission-free options trading, a more complex product than stock trading. Options are contracts tied to a stock’s price, and they can increase both potential gains and potential losses, making this expansion a major step in Robinhood’s influence on retail trading behavior.
Robinhood announced it would begin letting customers trade bitcoin and ether, starting with a limited rollout in five U.S. states. Adding crypto brought a highly volatile asset class into the same app used for stocks and options, strengthening the “all-in-one” retail investing model.
Charles Schwab announced it would eliminate online commissions for U.S. stocks and ETFs, accelerating industry-wide price cuts. Robinhood’s model helped pressure large brokers to match zero-commission trading, spreading the pricing shift beyond fintech users to the broader investing public.
TD Ameritrade and E*TRADE moved to eliminate commissions on online U.S. stock and ETF trades, reinforcing that “commission-free” was becoming the industry norm. This marked a turning point where Robinhood’s pricing approach became standard across many retail brokerages.
Robinhood began rolling out Cash Management, which combined investing with ways to hold and use cash, including interest and spending features. This reflected a broader fintech trend: turning a brokerage app into a multi-purpose consumer finance platform.
Robinhood announced fractional shares, letting customers buy portions of expensive stocks and ETFs with as little as $1. This feature lowered the entry price for diversification and helped retail investors participate in high-priced companies without buying a full share.
Robinhood suffered a major outage on March 2, 2020, a day of heavy market activity, preventing many users from accessing the platform and placing trades. The incident highlighted a risk of app-based finance: when infrastructure fails, retail customers may be unable to respond to fast market moves.
The U.S. SEC charged Robinhood Financial with misleading statements about its revenue sources and with failing to satisfy “best execution,” the duty to seek the best reasonably available trade terms. Robinhood agreed to pay a $65 million civil penalty, intensifying scrutiny of payment for order flow (PFOF), a common way zero-commission brokers earn revenue.
Amid extreme volatility in “meme stocks” like GameStop and AMC, Robinhood limited customers to closing positions in certain names, effectively restricting new buys. The move triggered backlash from users and lawmakers and drew attention to clearing and collateral requirements that brokerages must meet during volatile periods.
The U.S. House Financial Services Committee held a high-profile hearing on the GameStop episode, including testimony connected to Robinhood and its trading restrictions. The hearing framed the retail trading surge as both a market-structure issue (clearing, liquidity, short selling) and a consumer-protection issue (risk, transparency, app design).
FINRA announced a roughly $70 million package of fines and restitution against Robinhood related to supervisory failures, misleading communications, options trading approvals, and the March 2020 outages. The action signaled that regulators viewed parts of the retail trading boom as tied to compliance and operational weaknesses, not just market excitement.
Robinhood priced its IPO and began trading on Nasdaq under the ticker “HOOD,” turning a leading retail-focused brokerage into a publicly traded company. The IPO served as a capstone to the 2013–2021 story: commission-free, app-based trading moved from a startup experiment to a major force shaping U.S. retail investing.
Robinhood, commission-free trading, and the retail trading surge (2013–2021)