Apps like Robinhood make investing easier. Maybe too easy.

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APPs like Robin Hood of Made Stock Market, investing easier, but at what cost from American public media this is Marketplace Tech Jack Stewart in Hollywood. Maybe. You're one of the ten million plus people who've set up an account on the trading APP. Robin Hood the company's been in the news recently as people start to take a critical look at its business model. Robin hoods the highest profile example of APPs that say they're increasing access to the stock market by making trades free. Critics say their game `fine trading with psychological nudges and push notifications, which encouraged frequent and potentially risky trades. There are few controls or limits for what could be inexperienced users in June. Twenty year old Alex, Kerns killed himself after he logged onto Robin Hood and saw what he thought was a negative seven hundred thirty thousand dollar balance Professor Vicki Bogan founder of Cornell University's Institute for Behavioral and household. Finance researches the psychology of investing. Being able to trade online is nothing new, but beyond just the. Marginal incremental convenience of having on your phone versus on your laptop. Something about some of these, APPS is that they're designed to encourage people to trade and to trade more. because. It's part of their business model. They make more money when people make more trades, and so you know when you make a trade, there's confetti in congratulations that are encouraging people to trade more, so it's beyond just the reduction in transaction 'cause it's also the way the APPS are structured to nudge people to participate more and to trade more. So I suspect what these platforms would argue is that they're just making it easier for people to access the stock market and build wealth in the way. The wealthy people have always been able to do. Is that a fair argument? Yeah, I'm very sympathetic to that argument. I actually on some level. I agree that it's always a good thing to give. Households have access to financial markets. You're exactly right in that. Participating in the stock market is. With a long term investment horizon is a way that people. Can and have been able to build wealth. But these ads cannot exist in an unregulated unchecked environment. What sort of protections would you like to see? There are a lot of things. But. The person that can Pinatubo aside as a result of seeing this negative balance was only twenty years old. And so this is a person that can't. Buy Alcohol and can trade options in a way that could get him in very serious financial leverage. And so in the same way there were some guidelines protections with the credit card act in two thousand nine limiting access for young adults with credit card to credit cards. I think we need to think about some of those types of protections as well. That's freaky Bogan. Cornell University after Alex Kuhn's death Robin Hood released a statement saying it might restrict more complicated trades from some customers with checks to make sure they know what they're risking with options trading in particular.

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