Robinhood Makes UK Debut, Temporarily Pauses Margin Trading
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Robinhood has rolled out its brokerage services in the UK following two unsuccessful attempts. However, the challenges for the broker remained as it ceased margin trading options from its UK services hours after the debut.
A representative for Robinhood cited that Margin investing has been halted as the broker continues its discussion with the regulator.
Robinhood Plans To Provide Non-Stop Trading Services, Five Days A Week
Margin investing is intricate and includes providing leverage to traders, enabling them to boost positions. There are risks associated with this kind of trading, as there can be huge losses if the market goes in a different direction.
Upon its launch, a Robinhood UK page on margin trading clarified that the firm could provide the product in the nation because of a “regulatory exemption”. It also explained that it would collect a 12% interest fee on loans. Though, that page was taken down after a short while.
Besides the halted margin trading, Robinhood is also providing brokerage services with over 6,000 stocks listed on U.S. exchanges to customers in the UK. To challenge fierce competition, the US broker provides no-commission services in the United Kingdom and 5% interest on unallocated capital.
The broker mentioned that it will remove the charges for foreign exchange transactions when traders in the UK buy American-listed stocks. In addition, it will provide trading services non-stop, five days a week.
In 2020, Robinhood first attempted to introduce services in the UK but was unsuccessful. It then tried to obtain Ziglu, the UK-based trading application. However, the agreement did not occur.
The Firm’s Income Is Generated From Three Primary Sources
The most recent successful launch arrives as the US broker announced last year its intentions to make yet another effort to introduce services in the UK. In addition, the broker became part of the European Union by launching its digital currency exchange services.
Surprisingly, Robinhood began operations in the UK after Public.com, another American-based broker, withdrew its services from the UK, just eight months into its launch.
Robinhood Markets is a US financial services firm with its headquarters located in Menlo Park, California. It manages an online trading platform. This platform enables no-commission trades on cryptocurrencies, exchange-traded funds, and stocks, including personal trading accounts through a mobile app launched in March 2015.
The company is a FINRA-approved broker-dealer, licensed by the U.S. Securities and Exchange Commission. It is also part of the Securities Investor Protection Corporation. The firm’s revenue is generated from three primary sources: margin lending, supplying order information to high-speed traders, and interest received from client’s cash balances.
