Overview of the Stock Trading App Industry: Trading Moves Online

There has been an increase in the use of stock trading apps recently: More than 3 million people signed up for Robinhood in the first quarter of this year, compared to Acorns’s 45 percent growth.

More and more people are staying at home due to the coronavirus pandemic, which is obviously a factor. Additionally, the stock market’s volatility may be encouraging people to take advantage of investment opportunities.

Using investment apps to attract new customers, particularly tech-savvy millennials and Generation Zers can help financial institutions expand their customer base. When it comes to playing the stock market on a mobile device, there is a wide range of options available.

Finance professionals could benefit from a closer look at a few of the most popular models and the ways in which app technology is reshaping the industry.


As far as stock trading apps go, Robinhood is currently the most popular name. For a while, it was the most infamous for technical problems earlier this year, but the company says it has since improved its infrastructure and capacity to avoid such issues. Naturally, the question of delivering on that promise and regaining the trust of customers remains unanswered.

Putting aside the company’s technical issues, a shifting market now confronts Robinhood. The app’s ability to provide no-fee stock trades was one of its original major selling points, but several competitors, including those from major firms such as Interactive Brokers, Charles Schwab, and Fidelity, have emerged in that area.

The simplicity of Robinhood is a boon for new investors and those who prefer a more hands-on approach, but it can be a hindrance for more seasoned stock traders. According to a survey conducted in March, it came in last place for research tools, portfolio analysis, and investment selection.

More cryptocurrency options and portfolio profiles have been added to Robinhood as well as features like fractional investments and cash management. As a starting point for younger customers who have the time and risk tolerance, the app is still widely regarded as a viable option by many. Such users may look for more established brokers or investment banks because they are looking for more secure options.


Investopedia calls E-Trade the “Best investment app overall,” citing the recent elimination of numerous fees. Because of its high ratings from the magazine, it has a wide range of mutual fund options and the flexibility to create customised portfolios based on social responsibility or growth stocks.

However, unlike some investment firms, this app does not have the pre-technology origins of Robinhood’s parent company. E-Trade was born out of the dot-com day trading boom of the 1990s. Morgan Stanley, the investment bank, bought it in February, giving E-Trade a venerable name and giving Morgan Stanley a stronger focus on consumers.

Before a user can start investing in a Core Portfolio, the app requires $500 in funds. Fixed-income portfolios require a minimum investment of up to $250,000, and AUM fees apply. E-Trade may be better than Robinhood at helping users scale up when they move from exploring the stock market to seriously investing because of the wide range of investment models and the inclusion of IRAs and both joint and individual brokerages.


TradeUP, an online stock app, now allows users to trade in markets outside of the United States as well. The Stock Exchange of Hong Kong Limited reports that nearly a third of the market’s capitalization is made up of Chinese stocks, which it began trading on in April after incorporating Hong Kong trading.

In the current climate, investors may find this opportunity for portfolio diversification particularly valuable. Coronavirus pandemics have had an impact on domestic stock markets, and the economy’s immediate future remains hazy. Sometime in the future, China could provide stability in the pandemic timeline.

TradeUP also offers no-commission trading, bonuses for deposits over $3,000, and heatmaps that explain the trading activity. Viewers can select from a day to a year’s worth of data on the maps, which show up-trending and down-trending stocks in different colours. It has a high level of security, but only a few types of stocks can be traded.

The Cash App

The Cash App has become a popular method of sending and receiving money, with a user base of 24 million as of March of this year. Last year’s final quarter saw the launch of Cash App Investing, a new service offered by the company. Easy-to-use features that appeal to novice investors are incorporated into the main app.

Those looking for more features may be disappointed by the same qualities. There are no bonds, options, or mutual funds that are supported by the Cash App Investing platform. IRAs, trusts, joint accounts, and a slew of other account types are incompatible with the app. Finally, the app does not allow users to access margin trading.

Cash App Investing is still in its infancy, so some of the features it currently lacks could be added in the near future, and all of the investment-related activities it supports are completely free. Fractional shares, which make it easier to invest in expensive companies like Amazon, could give this app an advantage over comparable ones.


It has been a problem with many of the other apps we’ve discussed. The gap is being filled by a number of well-known companies, such as The Vanguard Group, with fund-focused apps.

Transaction fees for Vanguard’s own funds and a number of others are waived; for the rest, Vanguard charges a flat $20 fee. Individual retirement accounts (IRAs), 529 college savings plans, and solo 401(k) funds are all options.

Although fractional trading is not a feature, users can still access open stock options on the app with no commissions or minimums. Vanguard, like TradeUP, makes it easier to trade on foreign exchange markets and gives users access to reports from well-known sources of financial information. However, the options commission fees are relatively high, and the platform itself is relatively simple, lacking many features that would appeal to frequent traders. Traders.


Many young people are attracted to the possibility of trading stocks online without ever having to speak to a human broker.

Definitely a mixed bag for brokerages and other financial firms. In other words, companies that can’t keep up with technological advances will be left behind, and even those that do succeed in making the switch may find their business models altered in ways that negatively impact their employees. As a result of a general shift toward eliminating commissions, many businesses may have to find new ways to generate revenue.

Trading apps and commission-free activity, on the other hand, maybe beneficial to the industry as a whole, especially in this era of increasing social isolation. Investors in their 20s and 30s were the most common newcomers to the stock market in the first quarter of 2020, according to data from major companies.

Although it’s not clear if these people will eventually move on to more complex trading, with personal input and management from brokers, many apps have premium options to make the switch easier if it does.

Stock trading is currently uncertain for a variety of reasons, one of which is the rise in the popularity of trading apps. However, they are one of the few that can be controlled to some extent by companies. A firm’s future clients can be more assured through careful research of new apps and stakeouts in the emerging landscape.

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