Robinhood’s Quirk Can Cost You THOUSANDS Per Trade
While embarking on my stock market investing and trading journey, I stumbled upon a taxation concept that other beginner traders may not know. And it’s potentially costing them thousands!
This concept is something everyone in the stock market should be aware of, but the solutions I offer will primarily be for beginners trading on Robinhood. Waves of young investors are surging to Robinhood, one of the fastest growing brokerage firms in history, due to its simplicity, sleek user interface, and zero commission fees. But with Robinhood’s ease of use and low barriers for entry comes a lack of understanding of what happens “under the hood”.
No more beating around the bush, since this is an important message to convey. In short, Robinhood has default settings that sell your longest-held shares when you execute a sell order, which means you may pay higher taxes for the sell order than you need to! To save on taxes, one must understand the concepts of Cost Basis Methods. In this article, I will walk through the related finance and accounting education, and finally show you how you can change Robinhood’s settings to save on your taxes.
Robinhood has default settings that sell your longest-held shares when you execute a sell order, which means you may…