Robinhood's Hood Summit: A New Era for Active Traders

The Hood Summit, the first-ever event hosted by Robin Hood, was introduced by the Chairman and CEO, who expressed gratitude for attendees' safety amidst recent hurricane impacts in Florida. This event marks a significant moment for Robin Hood, emphasizing the importance of traders in their operations.

The CEO acknowledged mixed feelings among users regarding their experience with Robin Hood, inviting honest feedback. He recognized that many users felt the platform could improve, particularly in areas that cater to more advanced trading needs.

In a shift from previous presentations, the CEO shared critical quotes about Robin Hood's limitations, particularly for advanced traders. He highlighted concerns from sources like Investopedia and Reddit, noting issues with trading options and the quality of charts, which reflect a need for improvement.

The CEO discussed a strategic pivot made in 2022, recognizing that while Robin Hood effectively attracted new investors, it struggled to retain more active traders who sought advanced tools and better charting. This realization prompted a company-wide effort to enhance the platform for active traders.

The CEO recapped significant enhancements made for active traders in 2023, including a reduction in margin rates to the lowest among leading brokerages, which was well-received. Additionally, a new tool called 'option simulated returns' was introduced, which has been utilized by nearly 1 million options traders to optimize their exit strategies.

Starting next week, users will be able to monitor their realized profit and loss (P&L) directly in the Robinhood app. This feature, highly requested by users, marks the first step towards full tax lot management, which is expected to be implemented later this year.

Robinhood has introduced joint investing accounts, allowing traders to share their finances with partners. This feature is optional, catering to the diverse preferences of traders regarding financial transparency with their partners.

Robinhood became the first U.S. retail brokerage to offer 24-hour trading of single-name stocks, a significant shift from the fixed trading hours established by the New York Stock Exchange in 1887. Since its launch last year, over $30 billion in trading volume has been executed during overnight sessions, indicating strong customer approval.

Robinhood is set to launch index options, a highly demanded trading product that allows users to track the performance of entire markets or sectors. These options will be cash-settled, enabling traders to hold them until market close without concerns about position sellouts. The rollout is expected in the coming months, featuring user-friendly design and competitive pricing.

Futures trading is coming to Robinhood, responding to long-standing requests from core users. The platform has developed a new interface tailored for futures, which trade around the clock, reflecting real-time market events. This capability was built upon the experience gained from offering 24-hour trading since last year.

During the internal testing of the new trading features, some advanced traders at Robinhood, including Chief Brokerage Officer Steve Quirk, have been so engaged that they traded during meetings. This enthusiasm highlights the team's passion for enhancing the trading experience for retail traders.

The session begins with an emphasis on audience participation, highlighting the upcoming election and its impact on market behavior. The speaker asks attendees if they were active in the market during the 2016 election, noting a significant market reaction that evening, where the market dropped nearly 6% before rebounding to a 1% increase by the next morning.

The speaker discusses the volatility of the market during the 2016 election night, emphasizing that only Futures were trading at that time. This allowed traders to either hedge their portfolios or take advantage of the market's rapid movements, showcasing the importance of being prepared for market-moving news.

Grace introduces the new Futures trading experience on the Robin Hood app, which will launch with 36 diverse products across various asset classes, including stock indices, crypto, energy, metals, and currency. This launch is positioned as a starting point, with expectations for more products to be added over time.

The audience is invited to participate in a live trading demonstration, focusing on the S&P index. An audience member expresses a bearish sentiment towards the S&P, prompting the speaker to engage further with the audience about their trading strategies and market outlook.

The speaker introduces the trading ladder tool, designed for retail traders to quickly assess market conditions and execute trades. This tool, originally created for institutional traders, has been reimagined for mobile use, allowing users to buy or sell easily while also catering to more advanced trading strategies.

The speaker discusses the process of placing a buy order at a price lower than the market, indicating a bearish sentiment. Despite this, the speaker's actions reflect optimism as they adjust the order price by dragging and dropping it to the current market price, successfully filling the order.

The speaker explains how to take profit from a trade by switching from a price level view to a profit and loss (P&L) view. They illustrate this by setting a profit target of $10, demonstrating the ease of executing this action with a simple tap.

The discussion shifts to the importance of quickly exiting trades during volatile market conditions, particularly around significant events like elections. The speaker highlights two methods for exiting: manually canceling working orders or using the 'exit and cancel all' button, designed for rapid response in fast-moving markets.

The speaker concludes by thanking participants for their engagement and announces three upcoming sessions over the next two days. These sessions will feature discussions with industry professionals about the futures market, emphasizing the value of the trading platform being demonstrated.

The speaker praises the trading platform, describing it as world-class and highlighting its user-friendly design that allows traders to access market information and manage risks conveniently. They express excitement about the platform's capabilities and look forward to user feedback.

Plans are shared regarding the expansion of the platform to include trading for stocks, options, and cryptocurrencies, with futures trading expected to roll out in the coming months. The speaker hints at a surprise feature related to this rollout, anticipated within weeks.

The speaker outlines the pricing strategy for futures trading, aiming for simplicity and competitiveness. They compare Robinhood's pricing of $0.50 per contract for gold subscribers and $0.75 for non-subscribers to competitors who charge between $150 to $225 per contract, often with additional market data fees.

The speaker sets the stage for a historical narrative, contrasting the current trading environment with that of 1980, when financial services were dominated by traditional institutions like Merrill Lynch and Morgan Stanley. They describe how these institutions restricted market access to the wealthy and charged high commissions, highlighting the evolution of trading accessibility.

In Palo Alto, California, physicist Bill Porter purchases an Apple 2 computer and envisions using it for stock trading from home. At a party, he meets computer programmer Bernie Newcom, and together they establish a company to develop this idea. After three years of hard work, a dentist in Michigan successfully executes the first electronic trade via CompuServe using their software, marking the inception of the electronic trading revolution.

As the years progress, millions of individuals begin trading from personal computers through platforms like E*TRADE, Thinkorswim, and OptionsXpress. This surge of independent traders disrupts traditional financial institutions, prompting them to acquire companies offering electronic trading services to maintain relevance. By 2024, major acquisitions occur: OptionsXpress is bought by Charles Schwab, Thinkorswim by TD Ameritrade, and E*TRADE by Morgan Stanley, leading to a consolidation that threatens the independence of traders.

Independent traders face a grim reality as their accounts are forcibly migrated to larger institutions, resulting in diminished services and a loss of the platforms they once cherished. After nearly fifty years of struggle, they find themselves ensnared in the very system they sought to escape, as the corporations that resisted change now dominate the landscape.

The narrative shifts to the introduction of Robinhood Legend, a new desktop platform designed specifically for active traders. The platform promises speed, stability, and customization, addressing traders' frustrations with external services for analysis and charts. The goal is to create an intuitive trading experience that allows users to log in, customize their platform, and execute trades within minutes, all without the need for downloads or installations.

Robinhood Legend aims to simplify the trading process, contrasting with traditional platforms that require extensive training and setup. The platform is designed for ease of use, allowing even novice users to navigate and trade quickly. A live demo is planned with Vlad's father, a long-time Robinhood user, to showcase the platform's intuitive features and user-friendly interface.

The discussion begins with setting up a trading layout, which includes adding a watch list, a chart for price analysis, and sections for recent orders and positions, indicating a focus on trading activity.

The speaker expresses a desire to place a trade during extended hours and chooses Caterpillar as the stock, reflecting a belief in American infrastructure. They clarify that this is not a trade recommendation but proceed to buy shares of Caterpillar, celebrating the successful execution of the trade.

The speaker emphasizes the significance of charts in trading, noting that many users spend considerable time and money on external charting platforms. They introduce Robinhood Legend's high-performance charting tools, designed to be integrated within the trading platform at no extra cost.

The speaker demonstrates creating a chart template called 'Chart Spotlight,' which includes a watch list and a larger chart view. They highlight the platform's fast animations and the addition of technical indicators like simple moving averages and the RSI, while also mentioning the Ichimoku cloud as a personal favorite.

The speaker illustrates how to find an entry point for trading, specifically focusing on Tesla. They demonstrate drawing a demand zone on the chart and placing a buy limit order directly from the chart interface, showcasing the platform's user-friendly features.

The discussion shifts to Robinhood Legend's functionality in a 24-hour market. The speaker shares their experience of watching a Tesla event while using the platform, highlighting the ability to monitor market reactions live during product announcements, which adds a dynamic element to trading.

The presentation highlights two new trading interfaces on Robin Hood: the mobile Robin Hood ladder and trading directly from charts on Robin Hood Legend. These features are designed to enhance user experience by allowing traders to interact with market data more effectively.

A demonstration showcases a four-screen trading setup using Robin Hood Legend, emphasizing the ability to manage multiple charts and options chains simultaneously. The presenter illustrates how selecting a stock like Apple updates all linked charts and options, simulating a shopping cart experience for trading.

The team has tested Robin Hood Legend with up to seven monitors, indicating a strong focus on accommodating traders who require extensive screen real estate. The presenter humorously notes concerns about the demo desk collapsing under the weight of additional monitors.

Courtney, the design lead, introduces a feature called 'aura,' a customizable virtual light source that indicates the current market session. This feature allows traders to step away from their screens without losing track of market activity, enhancing the overall user experience.

Vlad wraps up the presentation by expressing confidence that Robin Hood Legend will become the primary trading platform for many users. He notes the evolution from a mobile investing app to a comprehensive desktop platform for advanced traders, hinting at future features like support for crypto, index options, and futures.

Robinhood is set to introduce new features including news screeners, indicators, and drawing tools, enhancing the trading experience. The new platform, Robinhood Legend, will be available for free to users, with a rollout beginning immediately and continuing over the next few weeks.

A recap of updates for active traders includes lowered margin rates, which are now the lowest among leading brokerages, and an upgraded options experience featuring simulated returns and tax lot management. Additionally, the introduction of index off options and futures trading with the Robinhood ladder is anticipated.

The speaker emphasizes Robinhood's commitment to supporting active traders by providing powerful tools that ensure they are not at a disadvantage compared to other platforms. The first Hood Summit will offer attendees further insights into these new products and features.

Attendees at the Hood Summit will receive early access to Robinhood Legend. Additionally, the first 1,000 viewers of the live stream who log into their Robinhood accounts will also gain instant access. Those not in the initial group will be prioritized in the next rollout.

To celebrate the increase in trading activity on Robinhood, the company is offering bonuses for transferring brokerage accounts. Users will receive 1% for transfers, 2% for accounts with at least $10,000 in margin balance, and 3% for IRA transfers for Gold members. This promotion is valid until October 27th, with no cap on the bonus amount.

The speaker expresses gratitude for the opportunity to share Robinhood's developments and looks forward to engaging with attendees throughout the summit. They encourage feedback on what users are excited about and what they would like to see in the future.