Robinhood is building a social network to follow the market moving trades

Social media has an unprecedented influence on stock prices.

Financial influencers give advice on actions on YouTube and Tiktok. Commercial communities on X and Reddit resuscitate financially undesirable actions from their ashes just for the same. It is undeniable that an increasing subset of investors is categorical on the use of platforms like X, Reddit, YouTube and Tiktok to make their financial decisions. The X-based financial community even has a name for themselves: Fintwit.

Robinhood popular online brokerage has decided to take advantage of it. The company announced Wednesday that it would add a flow of social media to its mobile application.

Called Robinhood Social, the flow will allow users to publish the trades they do and follow other traders, including famous investors and members of the Congress. These public figures are of course not all on Robinhood, but their publicly declared professions will be posted via avatars. Users will be able to share transactions in actions, crypto, options and other assets.

“We heard active merchants that they have strongly on social networks to navigate markets. But it is more difficult than ever to understand what is real and what is not,” shared the company in a press release on Wednesday.

All the professions displayed will be checked and live, said the company. Users will be able to discuss strategies between them and see the real -time performance rates of the merchants they follow.

The flow will first be launched by invitation only to certain American customers at the beginning of next year with greater availability to follow.

Is it a copy trade?

Yes, but also no. The copy trade is a technically legal practice but often examined in the United States, there are many platforms that offer it, especially the Israeli company Etoro, which is available for American residents in most states and allows users to automatically copy other investors.

On the other hand, the new Robinhood platform does not automatically copy transactions. It shows users real -time transactions and the user can decide to copy them manually.

After the regulatory examination he had to face his IPO in 2021, Robinhood could be very careful not to lift regulatory eyebrows.

Before its IPO, Robinhood had to get rid of certain features – including a confetti animation that broke out each time you place a job – that worried regulators were gamification and encourage short -term investment.

CEO Vlad Tenev himself suggested, as recently last December, that “the copy trade could be more interested in the interest in regulators”.

But it is always important and shows the power of social media trading that Robinhood will make the jump, despite the potential regulatory risks that its CEOs are on the horizon.

Social Media Stock Exchange Power

A growing subset of merchants is based on social media to make decisions. This led to the rise of memes stocks, such as GameStop and AMC Theatres. The infamous stock merchant of memes roaring Kitty led to the “mother of all short shorts” in 2021 (and another short smaller pressure in 2024) simply by publishing on GameStop Stock on X and Reddit.

An article from a public figure with a large suite on social networks can make a spiral of stock or a row, such as when the tweet of Elon Musk expressing his “little love” for Etsy in 2021 made the stock. Musk particularly likes its financial influence on social networks and has used this power several times, in particular compared to its same favorite Dogecoin.

There are obviously many drawbacks for this. It is not because an investor or a financial memelord makes a commercial decision, this does not necessarily mean that the decision is wise. A financial decision must be made after weighing all risks, and not motivated by the FOMO.

And all financial influencers are not trustworthy. There have been several notable cases of money laundering and manipulation schemes of actions carried out by so -called financial influencers.