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How to Buy Robinhood Shares UK – With 0% Commission

Robinhood’s upcoming IPO is one of the most exciting investment events of the year, with many investors looking to buy shares in the rapidly growing company. With revenues and customer acquisition both increasing at a meteoric rate, an investment in Robinhood looks set to be one of the most exciting additions to your portfolio for 2021. In this article, we explore How to Buy Robinhood Shares UK.

We will be covering everything you need to know about the company and its IPO and showing you how to invest in Robinhood with 0% commission.

How to Buy Robinhood Shares UK – Step by Step Guide 2021

Are you interested in buying Robinhood shares in the UK right away? If so, by following the four short steps below, you’ll be able to complete your investment in Robinhood in under ten minutes – all without paying a penny in commissions!

  • Step 1: Open an account with eToro – Head over to eToro’s homepage and click ‘Join Now’. Enter a valid email address and provide a username and password.
  • Step 2: Verify Account – Upload proof of ID (a copy of your driver’s license or passport) and proof of address (a copy of a bank statement or utility bill).
  • Step 3: Deposit – Deposit a minimum of $200 using a credit/debit card, bank transfer, or e-wallet.
  • Step 4: Buy Robinhood Shares Type in ‘HOOD’ into the search bar on the eToro platform and click the ‘Trade’ button next to the first option. Enter the amount of money you’d like to invest and click ‘Open Trade’.

Step 1: Choose a Stock Broker

The first thing you need to do before you buy shares in Robinhood is to find a reputable brokerage to facilitate your investment. There are numerous factors to consider, such as trading fees and minimum deposits, when choosing a suitable broker. Furthermore, with so many options to choose from, it may seem daunting to narrow down the possibilities.

Not to worry – the section below presents our recommendations for the best stock brokers to buy Robinhood shares in the UK.

1. eToro – Overall Best Broker to Buy Robinhood Shares in the UK

eToro stock broker Top of our list of online brokers for buying Robinhood shares is eToro. eToro has over 20 million users worldwide and is regulated by various reputable organisations, such as the FCA and CySec. What’s more, eToro is covered under the remit of the FSCS – which insures your trading capital in the unlikely event that the company goes out of business.

eToro offers 0% commissions when CFD trading, making the trading process incredibly cost-effective. Users can avoid all of the hefty trading fees that other brokers charge, as eToro includes all of their costs into the spread. Furthermore, eToro does not charge any deposit fees or monthly account fees, further reducing the platform’s cost.

etoro buy robinhood

Another appealing aspect of eToro is the useful CopyTrader and CopyPortfolio features that are offered. The former allows you to automatically copy the trades made by other eToro users, which is ideal if you are a beginner who is looking to make profits whilst learning. The latter allows you to invest in a professionally managed portfolio – without any crazy management fees!

The minimum deposit at eToro is only $200, and this reduces to $50 once you’ve made your first deposit. Users can fund their accounts via credit/debit card, bank transfer, and various e-wallets such as PayPal. So, if you’re looking to buy Robinhood shares in the UK, we’d highly recommend checking out eToro for your trading needs.

Pros

  • Buy Robinhood shares with 0% commissions
  • No stamp duty tax on UK shares
  • Huge selection of shares, ETFs, commodities, and currencies
  • No deposit or monthly account fees
  • Innovative CopyPortfolio feature
  • Regulated by the FCA
  • Covered under the FSCS

Cons

  • Minor withdrawal and inactivity fees

67% of retail investor accounts lose money when trading CFDs with this provider. 

 

2. Capital.com – Best Broker to Buy Robinhood Shares in the UK with Low Fees

Capital.com - Cheapest UK Stock Broker for 2021

If you’re looking for an alternative to eToro, we’d also highly recommend Capital.com. Capital.com has been around since 2016 and has grown rapidly, creating a solid user base thanks to its appealing fee structure and user-friendly platform. Notably, Capital.com is regulated by CySec and MiFID, ensuring that users are protected whilst trading.

capital.com buy robinhood

Capital.com doesn’t charge any commissions whatsoever when you place a trade on their platform, which is great news for people looking to trade the stock market. They also don’t charge any deposit, withdrawal, inactivity, or monthly account fees either. Furthermore, Capital.com even offers leverage facilities for users – leverage of up to 30:1 on certain assets, allowing you to boost potential profits by 30x!

Finally, Capital.com’s online trading platform is one of the best in the business. It is seamless to use and has various tools and features that can aid you with technical analysis – and users can even trade through the broker’s mobile app too!. Capital.com even have a vast library of educational resources that users can view, including video tutorials, articles, and glossaries. So, if you are looking for an alternative brokerage account to eToro, then we’d highly recommend Capital.com.

Pros:

  • 100% commission-free stock CFD trading
  • Trade over 3,000 stocks from the UK, US, and Europe
  • Integrates with TradingView for advanced charting
  • AI software helps you improve your win rate
  • Regulated by the UK FCA

Cons:

  • No price alerts in web trading platform

75.26% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider.

Broker Price Comparison

As you can see from the section above, eToro and Capital.com both offer fantastic ways of investing in Robinhood shares. The table below presents a breakdown of these platforms compared to other ones in the industry, allowing you to compare factors such as commissions and fees when trading.

Broker Commission Account Fee Deposit Fee
eToro 0% None None
Capital.com 0% None None
Fineco $3.95 per trade None None
Libertex From 0.1% None None
Hargreaves Lansdown £11.95 per trade None None

 

Step 2: Research Robinhood Shares

One of the key things to do when equity trading is what’s known as ‘due diligence’. This refers to the process of researching a potential investment and considering whether it would be a good buy or not. Areas such as the company’s financials and business model should be considered to gain a comprehensive understanding of your potential investment.

To help you with this, the sections below break down everything you need to know about Robinhood, ensuring you’re able to make an informed investment decision.

What is Robinhood?

robinhood logo

First thing’s first – what is Robinhood and what do they do? Robinhood is an American financial services company that offers commission-free trading of fractional shares and ETFs through its trading app. The company is heavily policed by numerous top tier regulators in the US, including the SEC and FINRA. Furthermore, Robinhood is a member of the Securities Investor Protection Corporation, ensuring users are afforded the highest levels of safety when using Robinhood’s services.

As Robinhood’s main selling point is the commission-free stock trading and ETFs trading, the company typically generates revenue through other avenues. Firstly, Robinhood earns interest on the balances in customers’ trading accounts; they also create revenue through margin lending. Another way that Robinhood generates income is through the sale of order flow information to high-frequency traders, with CNBC reporting that this business element is growing at a considerable pace.

robinhood IPO

At the time of writing, Robinhood has over 31 million users, which is exceptional considering the company was only founded in 2013. This user base has been grown through the cost-effective trading solutions offered and the various additional products that Robinhood has launched. One of the significant additions to Robinhood’s products and services in recent years is its cryptocurrency trading services. The timing of this addition has helped skyrocket Robinhood’s popularity with investors, as they still allow commission-free investing on crypto. Robinhood even offers banking services to US customers, providing an ‘all in one’ platform.

Robinhood has two ‘co-CEOs’ at present – Vladimir Tenev and Baiju Bhatt. The company is based in Menlo Park, California, and has over 1200 employees. Notably, Robinhood is about to undergo an Initial Public Offering (IPO) at the time of writing – this will be covered in-depth in the following section.

Robinhood Share Price

Now that you’ve got a solid overview of Robinhood’s business model, let’s dive into their financials. The first thing to note, and perhaps the most important, is that Robinhood intends to go public on 29th July 2021. The Robinhood IPO is set to be one of the most exciting IPOs this year, with many investors scrambling to get a piece of the action.

Before a company goes public in the US, it has to provide what’s called an S-1 filing which is presented to the SEC. This filing includes information on what the company intends to do with the funds, the company’s business model, and the methodology for calculating the share price.

robinhood financials

67% of retail investor accounts lose money when trading CFDs with this provider. 

According to Robinhood’s S-1 filing, the company intends to sell around 52.4 million IPO shares, with various significant shareholders in Robinhood also selling their shares. In terms of the Robinhood share price, the company anticipates the stock debuting between $38 and $42 per share. Putting all of these figures together, Robinhood aims to generate around $2.2 billion in funding, giving the company a valuation of $33 billion.

Interestingly, the Wall Street Journal noted that Robinhood will ‘reserve’ IPO access for between 20% and 35% of its shares for users of the Robinhood app. This will allow users to purchase at the IPO price. Ultimately, this process aims to be a sort of ‘reward’ to users since they will be able to get in at the debut price of the Robinhood stock.

Although we don’t know what the Robinhood share price will be until trading goes live, there’s great speculation about whether shares will be worth purchasing. We will dive into this more in the following sections, but an important thing to note is that Robinhood is growing rapidly. This growth, combined with increasing retail investors, makes Robinhood’s IPO an exciting prospect for investors worldwide.

Robinhood Shares Dividends

The upcoming Robinhood IPO has got everyone excited – and if you are interested in investing for income, you’ll probably be interested in knowing about dividends. At present, as Robinhood is not yet publicly listed, the company does not pay a dividend as it doesn’t have any tradeable shares. The vast majority of IPO companies do not offer a dividend when they go public, instead choosing to wait a few years until they’ve ‘found their feet’.

However, data presented by IPOhub noted that 84% of companies included in the S&P 500 do pay dividends. This adds validity to the idea that Robinhood may decide to offer a dividend to shareholders in the future. Ultimately this would come down to company performance and free cash flow – but if their financials continue heading in the direction they are currently, there’s every chance this could happen.

Robinhood ESG Breakdown

If you are interested in ethical investments, then it’s always wise to look at the impact that a company has on the environment and society. Typically this is completed through a company’s ‘ESG’ rating, which considers environmental, social, and governance elements. These elements combine to provide insight into how ethical and moral a company is.

As Robinhood are not currently public, the information of ESG elements is quite limited. This information will become more apparent as we go forward, but it is worth noting that its environmental impact is relatively low, thanks to the lack of physical locations used. However, in terms of the social implications, Robinhood did land itself in hot water during the early part of 2021, thanks to the ‘short squeeze’ brought about by Gamestop. This resulted in a considerable fine levied by FINRA, as reported by Which-50.

Are Robinhood Shares a Good Buy?

So, putting everything together, is it a good idea to buy shares in Robinhood in the UK? To provide further context into this, let’s look at two key factors to consider:

Rapid Growth

One of the main reasons to consider an investment in Robinhood is the company’s rapid growth. Q1 2021 customer figures were up 151% from the year previous, reaching 18 million users. Furthermore, sales growth in Q1 rose to 309%, which was primarily driven by the hype surrounding cryptocurrency at that time.

robinhood invest in IPO

As noted earlier, Robinhood does make money through the sale of customer order information to 3rd parties. Some people do raise concerns over this practice, but the fact is that it generates substantial revenue for Robinhood. Other avenues that the company creates income are through interest on customers’ accounts and subscription revenue from Robinhood Gold.

Cryptocurrency Options

Q1 2021 data for Robinhood noted that cryptocurrency revenue was up nearly 2000%, which equated to a large percentage of the company’s transaction revenue. The commission-free trading options for crypto have made Robinhood the go-to platform for vast numbers of retail traders, which is excellent news for the company’s user base and overall revenues.

Although Robinhood does not currently offer any crypto wallets or additional features, there are rumours that the company may offer these in the future. With the growth of cryptocurrency trading showing no sign of stopping, this could be a crucial aspect of the business to focus on. This crypto craze has also benefitted Robinhood in a marketing sense, as many users sign up for Robinhood’s services through word of mouth marketing brought about via Reddit and other forums. This means that advertising spend is much lower for the company, leading to more significant margins.

Step 3: Open an Account & Buy Shares

Now that we’ve covered Robinhood in-depth, it’s time to discuss the process of how to buy Robinhood shares in the UK. As noted earlier, you must choose a reputable and cost-effective broker to trade with, as this can make all the difference in the long run.

With that in mind, the five steps below will show you how to invest in Robinhood using eToro – all without paying a penny in commissions.

Step 1: Open an eToro Account

Navigate to eToro’s website and click ‘Join Now’. You’ll be asked to enter a valid email address and choose a username and password for your account.

etoro sign up

Step 2: Verify your Account

As eToro is regulated by the FCA and CySec, you’ll have to verify yourself before being able to trade. To do so, simply provide the required details for the KYC checks and then upload proof of ID (a copy of your driver’s license or passport) and proof of address (a copy of a bank statement or utility bill). eToro will then verify these documents, which usually only takes a few minutes.

Step 3: Make a Deposit

New eToro users must make a minimum deposit of $200 to begin trading. This deposit does not have any fees attached and can be made via:

  • Credit card
  • Debit card
  • Bank transfer
  • PayPal
  • Neteller
  • Skrill
  • Trustly
  • Klarna

Step 4: Search for Robinhood Shares

Type ‘HOOD’ into the search bar on eToro’s trading platform and then click on the first option. On the page that follows, click ‘Trade’.

etoro buy robinhood shares

Step 5: Buy Robinhood Shares in the UK

An order box will now appear on your screen, in which you can enter the amount you’d like to invest in the company (minimum of $50). Once you are happy with everything, click ‘Open Trade’.

Congratulations! You’ve just invested in Robinhood – without paying any commissions whatsoever!

67% of retail investor accounts lose money when trading CFDs with this provider. 

Robinhood Shares Buy or Sell?

So, overall, are Robinhood shares a buy or a sell? We are inclined to stick with the former, although it’s hard to say at present. Taking a buy or a sell position in the pre-IPO phase is typically a risky bet, as nobody knows what the Robinhood share price will be until it goes live.

One of the main reasons to consider an investment in Robinhood is its brand appeal and well-established nature in the financial services sector. Furthermore, TechJury reported that the crypto market is expected to grow at a rate of 3.5% per annum between now and 2026. This highlights how popular these digital currencies are – especially with retail traders. With this popularity continuing to rise, it’ll mean companies such as Robinhood will continue to be in high demand going forward.

buy robinhood shares in the UK

It is worth noting that Robinhood is still under threat of numerous class-action lawsuits related to its operations over the past year. When investing in the company, it is wise to be aware of this factor. However, if these can be sorted quickly and efficiently, it’ll clear the path for Robinhood to continue growing post-IPO.

Overall, Robinhood looks set to be one of the most exciting investment opportunities of the year. Although we won’t know the Robinhood share price until it goes public, the fact remains that investors worldwide will be keeping an eye out for potential opportunities to add Robinhood to their portfolio. If the company can continue growing at the rate it is and also add additional features to grow its user base even more, then there’s certainly scope for Robinhood to establish itself as one of the major players in the industry.

eToro – Buy Robinhood Shares with 0% Commission

In summary, Robinhood looks set to be one of the most exciting IPOs this year, with many investors looking to get involved when shares go live. With sales and revenue increasing at a rapid rate and the ever-growing popularity of cryptocurrency showing no signs of stopping, an investment in Robinhood could mean great things for your equity portfolio.

If you’re looking to buy Robinhood shares in the UK, then we’d recommend using eToro to make your investment. eToro offers commission-free investing on all of their stock CFDs, with users able to make trades from as little as $50. What’s more, eToro is regulated by the FCA and covered under the FSCS, ensuring all users are safe and secure when trading.

etoro logo

67% of retail investor accounts lose money when trading CFDs with this provider. 

FAQs

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Connor Brooke author check sign Pro Investor

Connor is a Scottish financial expert, specialising in wealth management and equity investing. Based in Glasgow, Connor writes full-time for a wide selection of financial websites, whilst also providing startup consulting to small businesses. Holding a Bachelor’s degree in Finance, and a Master’s degree in Investment Fund Management, Connor has extensive knowledge in the investing space, and has also written two theses on mutual funds and the UK market.

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