🚨 Opening Playbook is off today🚨
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I need to share something with you that even surprised me.
If you’ve followed my work for any length of time, you know I had blacklisted Robinhood from my trading life for quite some time. I think their option fills are garbage — terrible for spreads. I’ve tested them 1:1 against my Schwab account and there’s simply no comparison.
But here’s the thing — I’m heavily considering moving my investment portfolio to Robinhood. Notice I said investment, not trading. There’s a critical difference here.
Let me walk you through the math that’s making me reconsider everything.
The Numbers That Got My Attention
Robinhood recently offered a 3% match for transferred balances for Gold members. That promo has ended, but the underlying math that got my attention is still worth discussing because it forced me to re-evaluate where my long-term portfolio sits.
The match alone made a $100,000 transfer worth $3,000 instantly, and a $1,000,000 transfer worth $30,000. Even though the window has passed, the analysis it sparked is still relevant.
The real kicker is the margin rates. Schwab and JPMorgan both charge 10%+ on margin right now. So if I use $100,000 of buying power and hold it for a year, I’d pay about $10,000 in interest, maybe more depending on my balance. Robinhood is closer to 4.5%.
Using that same $100,000 of marginable buying power for a year, I’d pay $10,000 at Schwab versus roughly $4,500 at Robinhood. That’s a $5,500 difference — which translates to a 5.5% gain in returns just by switching platforms.
That’s not a small edge. That’s the kind of structural advantage that compounds over time.
Why This Still Works for My Investment Account
Here’s my framework for this decision: I only buy stock in my investment account, not options. That means fill quality doesn’t really matter. Everybody’s going to be relatively the same on stock fills — down to the penny.
Even though the transfer match required a five-year holding period, that aligns perfectly with how I treat my long-term investments anyway. I’m not touching this account for short-term trades.
Now, to be crystal clear — my trading account is staying at Schwab. I love my fills with Thinkorswim and they do a great job. For active trading, especially spreads, Thinkorswim is where I’m staying put.
But for long-term stock holdings, lower margin rates still make a compelling case. And with the way Robinhood is positioning itself over the next five years, this move remains appealing even without the promo interest attached.
I’m not telling you what to do — you need to evaluate your own situation and decide what’s right for your portfolio. But the math that pushed me to revisit this decision is still very much in play.
Sometimes the best move is separating what works for trading from what works for investing. This might be one of those times.
Graham Lindman
Graham Lindman Trading
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.Â
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