Robinhood CEO Says Only 2% of Users Trade on Margin

The video discusses the risks associated with trading on margin, particularly for less sophisticated investors. It highlights the trading behaviors of Robin Hood customers, noting that most engage in long-term investing. The video explains Robin Hood's margin policies, including the Robin Hood Instant feature and the requirements for borrowing on margin. It emphasizes the ethical responsibility to protect less sophisticated investors from financial harm. Finally, it addresses liquidity management and capital requirements, explaining how Robin Hood prepares for potential financial challenges.

What percentage of Robin Hood's customers engage in margin borrowing?

• 10%

• 3%

• 13%

• 2%

What is Robin Hood Instant?

• A type of margin account

• A courtesy allowing immediate access to deposited funds

• A premium service for gold customers

• A loan service for buying stocks

Why is there a greater responsibility towards less sophisticated investors?

• They have more investment options

• They are more likely to take risks

• They have more financial knowledge

• Their financial stability can be severely impacted

What concern is raised about the financial industry in relation to less wealthy individuals?

• They have better investment opportunities

• They are more knowledgeable

• They are often taken advantage of

• They receive more benefits

Why did Robin Hood raise additional capital?

• To offer more services

• To expand their customer base

• To prepare for future unexpected events

• To meet immediate deposit requirements