Stock trading platform Robinhood expands operations to the United Kingdom, now available for use.
Robinhood, the popular U.S. trading platform, has finally made its long-awaited debut in the U.K. The company, which has been aiming to bring its trading services to the U.K. for four years, officially launched its operations on Tuesday.
Jordan Sinclair, President of Robinhood UK, stated that the full launch marks a new chapter for the company. Sinclair, who has experience with international expansion, having pushed Freetrade into its first international market, Sweden, in 2022, is leading the charge in the U.K.
Since November, 70% of trades on Robinhood have been for fractional shares, a feature that is also available on the U.K. platform. New sign-ups and referrals can even earn fractional share rewards between $7 and $175. U.K. traders can use Robinhood to trade without foreign exchange fees or account minimums, making it an attractive option for many.
However, the U.K. launch does not include margin investing, a form of trading where customers borrow money for larger trades. Robinhood has paused margin investing as they continue discussions with the regulator. U.K. traders will also have to contend with 12% interest on loans due to a regulatory exemption.
Robinhood is offering an appealing feature for U.K. traders - uninvested cash can earn traders a 5% annual equivalent rate. This could be a significant draw for those looking to maximise their returns on cash holdings.
JMP analyst Devin Ryan sees three opportunities for Robinhood with the U.K. launch: gaining market share, attracting new investors, and serving as a steppingstone for global expansion. With potential licensing rights for further global expansion on the horizon, Robinhood's U.K. launch could be just the beginning.
Despite the focus on international expansion, Robinhood is not forgetting its roots. The company is focusing on strengthening its core business in the U.S. and making further investments in its foundational systems. The Robinhood app set up a waitlist for U.K. traders in November, indicating a strong demand for the platform in the U.K. market.
Roughly one-third of trading volume on Robinhood has occurred outside of market hours, suggesting that the platform appeals to traders who are active at all times of the day. With its user-friendly interface and focus on fractional shares, Robinhood could revolutionise trading in the U.K. for many.
