Investments

Can You Day Trade In Fidelity

By David Krug David Krug is the CEO & President of Bankovia. He's a lifelong expat who has lived in the Philippines, Mexico, Thailand, and Colombia. When he's not reading about cryptocurrencies, he's researching the latest personal finance software. 7 minute read

There is an abundance of online stock brokers available nowadays. Even for seasoned investors wishing to make a shift, the market has become more complex with the advent of commission-free online trading choices like Robinhood and the growth of automated investment platforms (robo-advisors).

Not every online broker is created equal, but we can contrast two of the best: Fidelity Investments and Robinhood. You’ve undoubtedly heard of both if you’ve done any homework on the various internet investment opportunities available to you. Perhaps you were also aware of Robin Hood’s role in 2021’s Great Short Squeeze.

Since Fidelity and Robinhood are both widely used and distinctive in their own ways, a direct head-to-head comparison of the two is warranted. Get ready to make an educated choice by reading on for a detailed examination of the benefits and drawbacks of each of these online brokers.

Important Characteristics

Both Fidelity and Robinhood are founded on the idea that investing in the market shouldn’t cost a fortune, whether you’re in it for the long haul or just looking for quick profits.

There is an abundance of online stock brokers available nowadays. The development of automated investment systems (robo-advisors) and the advent of lean, commission-free online trading choices like Robinhood have further added to the confusion of new and seasoned investors alike.

Not every online broker is created equal, but we can contrast two of the best: Fidelity Investments and Robinhood. You’ve undoubtedly heard of both if you’ve done any homework on the various internet investment opportunities available to you. Perhaps you were also aware of Robin Hood’s role in 2021’s Great Short Squeeze.

Since Fidelity and Robinhood are both widely used and distinctive in their own ways, a direct head-to-head comparison of the two is warranted. Get ready to make an educated choice by reading on for a detailed examination of the benefits and drawbacks of each of these online brokers.

Account and Platform Types Available

Users of Fidelity have access to a wide variety of deposit and investing options. Robinhood now only supports a single trading account type and platform, however this may change in the future.

Account and Platform Types at Fidelity

When it comes to self-directed investing, Fidelity provides a number of account options:

  • A taxable brokerage account (The Fidelity Account) providing commission-free stock, ETF, and options trading, as well as fractional share investment.
  • Traditional Individual Retirement Accounts
  • Roth Individual Retirement Accounts
  • IRA Rollovers
  • Accounts for medical expenses
  • 529 college savings plans
  • Accounts that pay interest and offer FDIC protection on qualified amounts.

Customers who meet Fidelity’s requirements can apply for and be granted access to margin trading in their Fidelity Account. Variable margin rates begin at 4.00% for larger accounts.
Fidelity’s Busy Trader Pro is a cutting-edge desktop trading program designed for active traders like day traders.

Active Trader Pro, which is similar to TD Ameritrade’s thinkorswim trading platform, includes a number of advanced tools that are necessary for acquiring and maintaining a competitive advantage in the current market environment.

  • Alerts for new highs and lows in stock price, increases in intraday volume, and technical crossings, all of which are measured and analyzed in real time.
  • Transaction-related data visualization tools that demonstrate the possible benefits and risks of a certain trade
  • Get all the information you need about your investments in one convenient location, including breaking news, earnings reports, and other market activity.

Account and Platform Types on Robinhood

Robinhood only provides one form of investment account, a taxable brokerage account, which allows users to trade stocks, options, and cryptocurrencies without paying any fees.

In addition to its stock trading features, Robinhood also offers a cash management account that is protected by the Federal Deposit Insurance Corporation in the event that your cash balance is not invested. While Robinhood does not now provide IRAs, they may do so in the future.

Pricing and Plans

To attract self-directed investors, both Fidelity and Robinhood facilitate trades without charging any fees. Robinhood now offers a premium tier (Robinhood Gold) with additional features for paying users. When it comes to managed and hybrid investments, Fidelity has a number of options.

Information about Fidelity’s Pricing and Plans

The Fidelity Account, Fidelity’s self-directed account, is free to open and maintain for anybody who qualifies. Nonetheless, trading fees or transaction fees may be incurred for specific types of trades.

Fidelity does offer a number of managed account choices, and these do need recurring payments. Consider your financial situation, your investment objectives, and your management style, and then pick the one that best matches you:

  • When it comes to advising fees, Fidelity Go is a pure robo-advisor account with no minimums and a three-tiered structure: $0 for balances under $10,000, $3 per month for balances between $10,000 and $49,999, and 0.35% AUM (assets under management, annually) for balances above $50,000.
  • Fidelity’s Personalized Planning & Advice combines the efficiency of an investing robo-advisor with the in-depth analysis and advice of a human financial adviser (including one-on-one financial coaching). Fidelity’s Personalized Planning and Advice service has a minimum account balance of $25,000.
  • If you’re looking for a wealth management solution that can help you achieve your complex financial goals, go no further than Portfolio Advisory Services. Minimum account balance of $50,000 is required for Portfolio Advisory Services, which uses a group of financial advisers (rather than a single specialized advisor) and charges 1.10% AUM.
  • With reduced asset management costs (often under 0.65% AUM, but occasionally up to 1.50% AUM) and account minimums (typically $100,000, but sometimes as high as $350,000), Separately Managed Accounts (Strategic Disciplines) are a complex, strategy-specific service. For further information, check out Fidelity’s SMA Information page.

Robinhood’s Plans and Pricing

The majority of Robinhood’s features are free to use. There is a premium Robinhood plan called Robinhood Gold that costs $5 per month and includes the following features:

  • Level II market data for qualifying securities, including multiple bids and requests.
  • You may make a deposit anywhere from $5,000 to $50,000 instantly, and your account balance will be updated so that you can begin trading.
  • Access to Morningstar’s in-depth studies on about 1,700 equities, available to see as often as you like.
  • Profitable margin trading opportunities, with rates as low as 2.5% (subject to variation based on account size and other variables).

Investment Opportunities

Fidelity offers an extensive variety of investment vehicles, including but not limited to equities and exchange-traded funds. Robinhood’s selection may be more limited, but it nonetheless serves the needs of investors and traders.

Investment Products Offered by Fidelity

Here are some of Fidelity’s investing options:

  • Mutual funds and stock exchange-traded funds (exchange-traded funds)
  • Options
  • Loans from corporations, municipalities, and governments
  • CDs from FDIC-insured banks
  • Money pools that invest in bonds
  • Cash equivalents
  • Investors who put their money into index funds
  • Alternative Mutual Funds, such as Sector Funds
  • Annuities (insurance-like products that generally offer fixed, guaranteed rates of return)

Fidelity does not charge a commission on stock, option, or ETF trades. When buying or selling other instruments, there may be transaction costs involved. Fees (expense ratios) are a cost of investing in exchange-traded funds and mutual funds that are taken from a shareholder’s account balance on a yearly basis.

Investment Products Available on Robinhood

Robinhood allows users to trade in stocks, ETFs, cryptocurrencies, and options. Not one of them requires you to pay commissions or fees to make a trade.

Resources for Investor Research and Analysis

Investors of all shades may benefit from Fidelity’s extensive tools for studying the market. While Fidelity’s resource set is unparalleled, Robinhood Gold holds its own.

Information Gathering and Analysis Tools Provided by Fidelity

Fidelity provides various helpful research and analysis tools for all users, in addition to the trading tools and capabilities provided solely to Active Trader Pro subscribers:

  • Countless tools and calculators to help with a wide variety of financial matters, including retirement income, college savings and costs, IRA distributions, mutual fund returns, and more.
  • More than 6,000 stocks may be screened in stock and ETF screeners.
  • The fundamentals, technicals, and social sentiments of a stock, all in one convenient place
  • A measure of an equity’s current relative strength or weakness
  • Reports from internal and external equities analysts

Investor Research and Analysis Resources at Robinhood

However, Robinhood restricts its premium research and analytical tools to its Robinhood Gold members, leaving regular users with a smaller set of tools. However, there are a few features that may be used by anyone:

  • Price activity and basic charts
  • Diverse representations of market data, such as candlestick charts.
  • Provides both beginners and more experienced investors with access to a wealth of information

Bottom Line

Both Robinhood and Fidelity provide retail investors and traders access to the broader financial markets through online trading and brokerage accounts (and other asset markets). Aside from sharing a preference for free or low-cost transactions and a greenish color palette, they have nothing else in common.

Due to their differences, Robinhood and Fidelity may both be used to achieve your financial objectives. You might, for instance, use Robinhood as your primary bitcoin exchange and wallet while using a money management service from Fidelity to save for retirement or your children’s school.

Alternatively, you might choose to use only one system. Anyway, I hope you have a clearer idea of the benefits and drawbacks of both options.

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