NEW YORK (TheStreet) -- As investors, we are always looking for the best broker to fit both our trading style and our wallets. Traditionally, young and small investors have had difficulty breaking into the investing world as a result of high transaction costs. Over the last few decades, as transaction costs have plummeted with the advent of technology, $10 a trade is arguably high for those trading low levels of capital.
As a college student, many of my friends are always asking how they can get involved in the markets. Many simply want to buy a few shares of their favorite brands or want to start saving. Unfortunately, many are deterred when I explain the standard commissions within the business. For those investing only a few hundred dollars at a time, fees make profitability significantly harder and expensive -- in terms of account value.
Typically, I lead these investors towards commission-free offerings such as exchange-traded funds offered by the array of brokerage companies, including E*Trade, TD Ameritrade, and Fidelity. However, this weekend I discovered an interesting new concept, and a company, looking to remove these hurdles for small and young investors.
The company, Robinhood, is a new startup brokerage with some strong equity backing. Based in Palo Alto, Calif., the company has attracted a number of prominent investors including Google Ventures, Social Leverage, and Andreessen Horowitz, to name just a few.Founded by Vladimir Tenev and Baiju Bhatt, a couple of high-frequency trading engineers, they aim to bring a more efficient brokerage to a greater number of people. Based in technology, the company seeks to run a leaner version of the brokerage firms we know today. Robinhood will offer its users free trades, free market data, and require no minimum deposit -- all with standard SIPC insurance. Honestly, I could not imagine a better product for college students, like myself, looking to get started in the markets.
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