You have probably heard about the Robinhood app on YouTube and want to know if it’s available in Chile, right?
Robinhood is a modern and easy-to-use investment app from the US, which has introduced the concept of commission-free trading in financial products such as stocks and ETFs.
Want to know if the Robinhood app is available in Chile, its expansion plans, and the alternatives available in Chile? We’ve got you covered!
What is Robinhood?
Robinhood was founded in 2013. Since then, it has played a major role in disrupting the brokerage industry by allowing US retail investors to trade with no commissions, alongside its biggest rival, Webull. Robinhood is defined as a commission-free online broker that offers the possibility of trading stocks, ETFs, options, and cryptocurrencies.
The results are clear: over 18 million users! The competitors of Robinhood have been monitoring this exponential growth closely, and, in October 2019, some major well-established brokers in the US, such as E-Trade, TD Ameritrade, and Charles Schwab, announced in quick succession that they were eradicating trading fees.
Is Robinhood Available in Chile?
Unfortunately, Robinhood is not yet available in Chile, nor any other country outside the US.
It had planned to open in the UK in 2020, but it was postponed indefinitely.
Most recently, in early 2022, Robinhood has set aggressive goals to “open their crypto platform to customers internationally”. With this in mind, Robinhood has signed an agreement to buy Ziglu, a London-based crypto trading app, to help accelerate their international expansion, both in the UK and across Europe.
But do not lose hope! Meantime, you can still find some Robinhood Chile alternatives that have proven reliable (and perhaps even more reliable than Robinhood!). The covid-19 stock crash during the first quarter of 2020 showed some vulnerabilities of the Robinhood platform. The app collapsed several times, and investors could not trade during the most volatile markets in history. The company is facing some lawsuits due to these outages.
Besides, Robinhood has faced several security breaches in revealing sensitive information about its clients, and, at one point, it even allowed “infinite leverage” that was shortly corrected afterwards. Still, it did not avoid significant losses for some clients.
Robinhood Alternatives in Chile
To help us answer this question, we focused on reputable international brokers available in Chile. Given that, here are our suggestions:
Commission-free stock and ETF trading. You can also copy other traders/investors. Slick, modern, and easy for anyone to use. It is trusted by over 20 million clients worldwide.
Disclaimer: 67% of retail CFD accounts lose money.
Recent commission-free broker with no currency conversion fees. Besides, you have access to “curated investing” (similar to social trading).
Disclaimer: 56.65% of retail CFD accounts lose money.
eToro at a glance
Founded in 2006, eToro is a well-known worldwide fintech startup and the leader in the social trading field (follow other people’s trades), with over 20 million users worldwide. You can also invest in other products such as CFDs, ETFs, stocks, commodities, Forex, and cryptocurrencies through their platform, which is intuitive and simple to use, making it a good choice for beginners. Plus, they have started offering commission-free stock and ETFs trading in Chile (not all ETFs are commission-free).
Opening an account and depositing is easy, and you can even try it out with virtual money. On the downside, the only currency accepted is the USD, so you’ll pay currency conversion costs upon deposit and withdrawal if you use CLP, and spreads can be high for some products, like cryptocurrencies. Full eToro review available here.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 67% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
2# Interactive Brokers
Interactive Brokers at a glance
If you’re looking for an online broker with a wide range of products from different markets, solid trade execution, and a sophisticated trading platform, then Interactive Brokers might be a good alternative to the Robinhood broker.
Founded in 1978 and publicly listed in NASDAQ since 2007, Interactive Brokers is a global online broker that offers access to dozens of markets worldwide, not only US-listed assets. Besides the low costs, this is one of their main differentiators.
They also offer an educational area with free resources for financial education. On the downside, they charge a monthly inactivity fee, and that’s why this online broker is more recommended to more active and experienced traders.
Interactive Brokers launched IBKR GlobalTrader, a modern mobile trading app to trade Stocks and ETFs, ideal for beginner investors. Some of the features of IBKR GlobalTrader include automatic currency conversions, fractional shares, demo account, and more.
Nextmarkets at a glance
Founded in 2014, Nextmarkets is an online broker well-tailored for those with a basic understanding of the financial markets. It has a very intuitive and hassle-free mobile app. You can invest in financial products such as shares, ETFs, and CFDs on shares, ETFs, indices, forex, bonds, cryptocurrencies, and commodities.
In addition to the “Do-it-yourself” segment, Nextmarkets sets itself apart from its competitors because it offers “curated investing”. You have probably heard about social trading, where you follow other peoples’ trades. Nextmarkets wants to take the idea of social trading further by allowing you to benefit from the experience of proven experts (called “coaches”) and stock market professionals.
The fee structure is also unique: you only pay spreads. So, there are no fees on deposit, withdrawal, inactivity, currency conversion fees, and even no overnight fees in CFDs (something not usual in most brokers). On the downside, the web platform is quite “buggy”, you have no educational materials, and there is a €1 commission for orders below €250.
Nextmarkets Trading Ltd, the legal name of Nextmarkets, is registered in Malta and, consequently, authorized and regulated by the Malta Financial Services Authority (MFSA). You are protected up to a maximum of €20,000 on your money and assets.
If you want to learn more, check our Nextmarkets Review.
Which platform should you choose?
Some factors you should know when choosing an online broker are the fees charged, if it is regulated by top-tier institutions such as the SEC in the US, the range of products it allows you to trade (not all platforms allow you to trade cryptocurrencies or companies listed in Chile), among others.
The best online broker in your specific case will depend on your profile, preference, and objectives. Explore the websites above and decide for yourself!
A reminder that the above should not be seen as investment advice and should be considered information only. Investors should do their own research and due diligence about the services and opportunities best suited for their risk, returns, and impact strategy.
Hope we helped, and leave your comments below.
Other FAQs about Robinhood
How exactly does Robinhood make money?
The online broker earns money from interest earned on customers’ cash balances (money in your account not invested), by selling order information to third parties (high-frequency traders, for instance), and margin lending.
Regarding the selling of orders, the US Securities and Exchange Commission (SEC) is still investigating Robinhood for not fully disclosing its practice of selling clients’ orders to high-speed trading firms.
Until October 2018, Robinhood would not clearly state that it was receiving payments for order flows. By law, any financial company must reveal all the material facts an investor would want to know before making any investment decision.