Robinhood traders unable to exercise put options on trades against Silicon Valley Bank

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Robinhood, one of the most used trading platforms by retail traders, is finding itself in the mid of a controversy again after traders complained of challenges in withdrawing the profits from trading against Silicon Valley Bank and Signature Bank. The complaints come over two years since Robinhood halted meme stock trading in the mid of a trading frenzy.

Robinhood traders unable to withdraw profits from bets against SVB

The retail traders affected are those with put options, which enable them to be on a drop in share value. If the share price falls, the investor can sell the stock at a higher price than the market value and make a profit. The trader can also sell the stock to another trader who believes the drop will continue.

Last week, several Robinhood clients bought put options and predicted a decline in share value for Silicon Valley Bank and Signature Bank. However, these traders are currently unable to access their profits. The traders allege that Robinhood allows them to sell contracts or receive payments. These put options are slated for exposure today.

The traders might face these issues as the shares of the two banks can no longer be traded. Additionally, the affected stock is already making notable losses, and few traders are interested in purchasing it. Therefore, the situation has become frustrating for traders and challenging for Robinhood to resolve.

The CEO of Robinhood, Vlad Tenev, said that the company was working on resolving the matter. Nevertheless, Robinhood is not the only trading platform facing this issue. Traders at brokerage firm Fidelity have also announced challenges in exercising their options.

Situation comes two years after the GameStop crisis

Robinhood is a trading platform targeting retail investors. The platform allows retail investors to access the market under the same terms that large institutional investors use. The platform has transformed the trading space because traditional brokers have been forced to adjust their products amid increased competition.

Robinhood’s popularity exploded during the pandemic as more people turned to online platforms to access the capital markets. The situation triggered the emergency of “meme stocks” mainly traded on Robinhood.

Game Stock’s stock became one of the meme stocks at the time after a significant increase in its share value after hedge funds shorted it. Retail investors came together to buy the stock, further increasing its value.

However, after a few months of the GameStop stock rally, Robinhood suddenly made a controversial move to halt trading for the stock on its app. Other trading platforms such as Charles Schwab, IG Group, and TD Ameritrade also announced a similar move.

Robinhood received much criticism over the decision to halt the trading of GameStop shares. Over time, the company has changed its operations significantly, and it is more centrally controlled, allowing users to buy a maximum number of predetermined shares. Many retail traders could not access profits then, and the same thing could be seen with the SVB and Signature bank shares.


Ali is a professional journalist with experience in Web3 journalism and marketing. Ali holds a Master's degree in Finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of leading cryptocurrency publications including, CryptoSlate,,, Business2Community, BeinCrypto, and more.