Fees, fees, fees.

In the world of buying and selling of securities, there's a lot of money to be made.

I mean a lot. I once read a story of an 18 year old who became a millionaire in 20 months by investing $10000 into high volatility stocks.

Obviously your mileage will vary, and I'm not suggesting you do that.

But there are a lot of opportunities in financial markets.

It's great to grab profits now and then, but one sore point of trading securities is the brokerage fees.

You see, stocks have it worse than any other security. 

Stock traders pay what is called the spread, along with paying the brokerage fee and might even pay the individual brokers fees, if they don't trade for themselves.

While trading crypto, you don't pay the spread, which is good. But you do pay brokerage fees, and on some exchanges like Bittrex, you pay 0.5% of your total order size as the maker, as well as the taker.(0.25% each).

That seems like a small number, but if you make 10 $1000 trades every day, your fees would be about $5. If you do that every day for a year, the profit that should have been yours but is sitting in Bittrex's account would be about $1825. That's iPhone money!

And let's not forget that you would have a losing trades, which is normal for every trader. So you might end up running in the negative zone.

The solution? Feeless transactions.

Enter Robin hood. For trading stocks, there are no spread charges or broker commissions. Your profit is yours to keep.

And the same is for crypto. So you can catch those minute 0.1% moves if you so wish, without worrying about fees eating you up.

So what's the catch?

Well, for stocks it's pretty straightforward. There's really no catch. You just enjoy the feeless transactions you make. There's of course KYC which is important to be able to trade stocks,as it's required by the SEC.

But what about crypto? This is where it gets interesting.

You see, Robin hood is a great way to easily buy BTC and other cryptocurrencies with your dollars.

But where the problem lies is that you can't send your BTC out of the app.

That's the catch for crypto.

So that means you can't engage in many forms of trading that require you to send your crypto from one exchange to another to catch profits on the other exchange.(I think it's called arbitrage trading)

This also raises the question of security.

What if Robin hood goes down tomorrow?(Highly unlikely, but still) 

What if Robin hood gets hacked? What if their servers experience downtime for a week? What if the company folds up? What do you do then?

It is for this reason that I strongly advise against trading crypto on Robin hood, except you're a total noob and you just want to wet your feet.

Factor in the fact that there are no TA tools, so you're more or less guessing when to buy and sell. It's even worse than Luno, which is pretty bad on its own.

The bottom line?

Robin hood is great for stocks. It's more or less heaven for stock traders. In fact, they even give you free stocks ranging from $5-$200 on sign-up. 

But don't use it for crypto. Just don't.

Thanks for reading!