Robinhood and similar trading apps may not be impacting retail trading, but they have the potential for a devastating impact on individuals.
By now many of you know the story of Alex Kearns, a University of Nebraska student who committed suicide when he mistakenly believed that he had optioned himself into a $730,000 debt.
Kearns’s case is not just a story about a novice investor and an unhelpful broker. It is about a platform that uses psychology and persuasive technologies to maximize time on the service, gamify the investment process, coax users to hit the buy button, and keep them addicted to the app.
Even if the user doesn’t know what they are doing!
All of us are susceptible to these ploys, but young brains have been trained by apps and social media so that addictive behaviors some naturally. As such they are easy targets for the behavioral hacks employed by these apps.
Just like social media, these platforms know what they are doing. Addiction and depression are a feature, not a bug. Several studies have linked rising self-harm and suicide rates of teens to the depression-inducing platforms of Instagram and Facebook.
Robinhood would like nothing better than to have the growth curve of a social media platform. But an Instagram for stock trading has the potential to produce the same physiological harm that Instagram does.
It is time to put up some guardrails around these platforms. Before more harm is done.