Trading Stocks to $100k – Robinhood Challenge!

Welcome to part one of my video series where I try to take my Robinhood account to $100,000 by trading stocks and options.

BACKSTORY

A few months ago, I made a video about how I turned $1,500 into $62,000 in one month by trading stock options. I did this back in March when the market tanked, and the way I made money was by buying put options, which essentially allows you to bet that a stock price will drop in value.

One thing I didn’t cover in that video was my Robinhood account, which also had some pretty massive gains at the beginning of the year. I ended up withdrawing a lot of those gains to ensure I didn’t lose them if the market changed or if I started getting unlucky.

ROBINHOOD VS THINKORSWIM

Let’s talk about Robinhood really quickly. Robinhood has made trading seem more accessible to everyday people with two key features:

First, there are no commission fees. Normally, when you buy and sell stocks and options, you pay the brokerage to fill the orders for you. Not on Robinhood.

Second, the interface is just unmatched by other brokerages. Mainly that it’s super user friendly for beginners. Everything is simplified, it looks clean, and it’s pretty easy to navigate around and start spending money.

That’s why it’s been so alluring to people new to the stock market – it’s kind of a gamified experience that can be kind of addicting.

Here’s the thing, though: Robinhood sucks for options trading. Anytime you try to buy or sell contracts, it tends to be really slow and oftentimes won’t fill the orders for a good price.

When you place an order, Robinhood sends your order to market makers. Market makers are firms that offer quotes to both buy and sell shares or options. They make their money from the bid-ask spread. So when you see the bid for TSLA is $584.11 – that essentially means that’s the price someone is willing to pay for a share of Tesla. When you see the ask price is $585 for a share of Tesla, that’s the price for which someone is willing to sell a share of Tesla. So, there’s an 89 cent difference between the two. Generally, if you want to buy Tesla, you’ll end up paying closer to the ask price, and if you want to sell Tesla, you’ll end up receiving an amount closer to the bid price. The market makers profit off the difference.

Okay, so what does all of that mean for you? Well, essentially, if you want to buy Tesla, your order on Robinhood might not get filled unless you up the price you’re willing to pay to be closer to the ask price. Whereas, another broker may fill your order closer to the middle of the bid-ask spread, saving you money.

The other brokerage I use is a platform called ThinkorSwim by TD Ameritrade. Here, you pay commissions on options, which amount to 65 cents per contract.

To me, it’s worth the cost of commissions to get orders filled faster and at better prices. If you look, you can see I’ve spent over $1600 on commissions to TD Ameritrade this year, but in my opinion, it’s worth it.

And, while no brokerage is perfect, Robinhood has had reliability issues where the app may go down for an entire trading day. Oh, and 2,000 Robinhood accounts were accessed by hackers and looted back in October. So… not great.

BEGIN THE CHALLENGE

So, why am I using Robinhood? Well, I’ve got a little cash sitting in this account and I’m willing to make riskier plays with this account to see how quickly I can grow it. About one month ago, I had just around $700 in my account. Now, I’m going to see if I can take this $700 account and turn it into $100,000. I will also say, I got this idea from the YouTuber Biaheza, who is attempting to trade his way to 1 million dollars, so, if you don’t already, go subscribe to his channel.

Now, if you don’t understand stock options, I made a video explaining the basic concepts which you can find on my YouTube channel titled GET STARTED TRADING STOCK OPTIONS - BEGINNERS GUIDE.

Okay, so back to my Robinhood account. On the morning of the presidential election, I bought 5 contracts of ACB – Aurora Cannabis – for $69 per contract. My thought here was a lot of states had legalizing marijuana on their ballots, and if Biden were to win, the likelihood of it becoming legalized would increase, and this company would benefit. But just after the election, on November 4th, my account hit a low of $364.

The next day, once it became more apparent that Biden would win, however, my contracts more than doubled in value from $69 to $162. I decided to sell 3 of them. The next day, ACB shot up even more, and I sold one of my contracts for $630 – over 800% profit. And, then on the 9th, I closed out my last contract for $690 – for a 900% profit.

This brought my account to $1901.70.

I then decided to hop on a Wall Street Bets favorite – NIO. I bought 2 contracts for $149 each. It ended up shooting up that same day, so I sold one contract for $288 and a couple of hours later, sold the last one for $340.

This brought my account to over $2200.

I then decided to move some money into Bitcoin, so I bought about $1,500 worth of Bitcoin. I ended up selling all of it on the 24th for a profit of $203.46. The reason I sold was to move my money into the latest Wall Street Bets favorite – PLTR – Palantir Technologies.

Well, I timed it pretty perfectly, as PLTR took off like a rocket. The stock price increased 52% this past week, so this did wonders for my account. Here’s a breakdown of the plays.

I bought 3 contracts for $225 on the 24th and the next day, I sold 2 of them for $400 each. I then bought 10 more contracts for $52 each and sold them for $60 each.

And, then I bought 6 more contracts for $416 each and ended up selling 4 of them for $840 each.

Right now, my account is sitting at $6,480.80. Up 156% for the week and 776% for the month.

I’m currently holding 1 contract of NIO, 3 contracts of Palantir, and 1 contract of Fastly, with about $2200 sitting in cash.

WHAT’S NEXT

I am now $93,519.20 away from my goal, so let’s talk about what’s next.

Since Palantir really helped me revive my account, and I got the idea from Wall Street Bets on Reddit, I am going to continue sourcing trade ideas from there, but also – if you have any trade ideas you want me to try out for this challenge, leave me a comment below and let me know – and who knows? I may do it. I have my eye on Gamestop, which I may enter into a trade on Monday, but I’ll have to see how the market opens then.

One thing I didn’t mention when I was ragging on Robinhood earlier was their lack of charting tools. If you want to get more serious about trading, you really should use charting software that allows you to accurately see candlesticks for different timeframes, along with drawing tools that will allow you to mark the charts with technical analysis. Just about every brokerage other than Robinhood allows you to do this – like Webull.

But, I generally use ThinkorSwim for charting and trading my main brokerage account and a retirement account. So, even if I am doing actual trading in Robinhood, I will first look up the ticker inside ThinkorSwim and get a better idea of the price history and current momentum. I’ll also set alerts for key levels that will both notify me here on my computer as well as a push notification on my phone.

CONCLUSION

So, this was a good month of trading to say the least and a great way to kickstart this challenge. I’ll be posting follow-up videos to this at least once a month – and in the meantime, I’ll also be posting some more online business experiments like dropshipping.

I’ll also try to post some updates on my twitter, so, if you want to, give me a follow over there.