Since the financial crisis, the credibility of Wall Street has taken a beating. These days MBA graduates are as likely to work at socially minded start-ups as mega-banks. And day trading isn’t quite the popular sport it was in the helter-skelter days of the 1990s. Helping the planet is cool. Making unthinkingly large amounts of money is not.

In this context, you can see why Vladimir Tenev and Baiju Bhatt named their new stock-trading business Robinhood, after the English folk hero who stole from the rich and gave to the poor. It strikes the right anti-establishment, post-crisis vibe, even if Tenev and Bhatt aren’t exactly manning the barricades. Their business, after all, still involves trading in public companies and all the moral messiness that implies.





Still, several things differentiate Robinhood from E-Trade, Charles Schwab, and other incumbents. For one, it costs nothing to make a trade on their platform, while those other companies charge $7 or even $10 per trade. Robinhood is also mobile-first. The app–available just in an iPhone version at the moment–is designed to be used on the go, say, when you’re lining up at Starbucks.

The pitch seems to be working well so far. Prior to launching this week, Tenev and Bhatt had signed up over 500,000 people to their waiting list, and Robinhood has generated a lot of buzz in the financial media. Bhatt says the average age of users so far is between 26 and 27, which is many years younger than the median at Schwab and Fidelity.

In an interview, Bhatt explains that he and Tenev came up with the idea during the Occupy Wall Street protests in 2011. At the time, the Stanford roommates were working on their second startup, providing technology to institutional high-frequency traders. “Our friends and close family were saying to us, ‘Why are you working in finance? The system’s broken and you’re part of the problem.’ It was difficult for us to hear,” he says.





They could also see a big disparity between the prices the big banks and hedge funds were paying for trading (fractions of pennies) compared to lowly retail investors. “There was this incredibly cheap service for people who had the privilege, but for individual investors it continued to be prohibitively expensive. We thought ‘can’t we apply what we know about brokerages but instead of one company trading 1 million times a day, we would have 1 million customers trading once per day?” he explains.

Robinhood cuts costs by keeping things simple. It has no branches, doesn’t advertise, and doesn’t plan to invest in the stock-picking research and tools you get on the established sites. Bhatt says all that stuff is available for free online anyway, so it would be a duplication of effort. Plus, he thinks millennials don’t need the digital hand-holding of older folks, so customer service will be more limited.