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A cool feature from the Robinhood app is the potential to receive free stock both for you and the friend you refer to Robinhood. It’s a great way to add to your portfolio while also introducing friends to the stock market and the benefits of free stock trading from Robinhood. What stocks will you and your friends receive and is there any limit to this cool feature? Read on to learn the details of Robinhood referral codes.
How to Find Your Robinhood Referral Code
It’s hard to miss the Robinhood referral code in your app. After you log in to the app, you’ll see on your main balance screen a small gift box logo with the words “FREE STOCK” in the upper right corner. Simply click on the logo and you will arrive at your referral page. From there, you can either choose to enter the person’s email you’d like to invite, or obtain a unique link that you can send the person by text message. Robinhood even has the ability to connect your phone’s address book, so you can easily scroll through to be reminded of any investment-minded friends.
How To Get Free Stocks With Your Robinhood Referral Code
For every person you invite and who signs up for a Robinhood account, you will both receive a free share of a randomly selected stock in Robinhood’s inventory. You can refer as many friends as you like, but the value of the free stocks you receive is limited to $500. Once you approach $500, you will not receive any additional shares; your friends, however, will still receive their complimentary share.
What Stock Will You Get From Robinhood Referrals?
The process for receiving free stocks is supposed to be random. Here at BroStocks we have received some doozies, including Chesapeake Energy (CHK) and Zynga (ZNGA). But hey, a free share of stock is a free share, and even if you land a penny stock it could get pumped back up again one day.
Others on Reddit have reported receiving such heavy hitters as Apple and Facebook. While it seems random, there is actually a calculation behind the odds. Robinhood states that 98% chance that the stock will be worth $2.50 and $10. There is a 1% chance you will receive a stock worth between $10 – $50. And a further 1% chance that the stock will be worth $50 – $200.
Currently, Robinhood is running a promotion through June 2020 on at least some accounts where if you refer three friends, you receive a fourth share as a bonus. There is no better time to try out Robinhood referrals than now.
After you receive your free share, you can choose to sell it within two business days. Keep in mind you won’t be able to access the cash from that sale until 30 days have passed.
Why Does Robinhood Give Away Free Stocks?
Unlike traditional brokers, Robinhood does not rely on commission fees to make their profits—in fact all stock trades are free. Instead, Robinhood relies on income from advanced traders through their Robinhood Gold program, where they charge interest on margin accounts, and also earn interest on uninvested cash sitting in customer accounts.
For more on how Robinhood makes money, check out our article here.
So it makes sense that Robinhood has an incentive to add a higher quantity of accounts and the offer of free shares is a great incentive to do so. In addition, Robinhood is evaluated more as a tech company than a traditional broker. So their ability to show a rapidly growing base of active users is an important metric as it continues to seek investments from venture capitalists and eventually IPO.
Regardless of the business metrics involved, the Robinhood referral code is a great way to add a few shares to your portfolio and getting your friends involved in the process.