Robinhood UK Launch – No Fee Trading, Margins on Hold

After two unsuccessful attempts, Robinhood (Nasdaq: HOOD) finally entered the United Kingdom market but has temporarily removed margin trading for UK users moments post-launch.

Questioning the “Regulatory Loophole”

The spokesperson from Robinhood stated they put margin investing on hold while in talks with regulators.

Margin trading, which involves using leverage for larger trades, is high risk and can lead to significant losses if markets turn.

Robinhood initially indicated on its UK site that a “regulatory exemption” allowed them to provide margin trading, boasting a 12% interest rate on borrowed amounts. This detail vanished from the website shortly after that.

Services Without Fees

Robinhood offers over 6,000 US-listed stocks to its UK clients, employing a no-commission model to stand out amidst fierce competition. They also provide a 5% return on uninvested funds.

There are no charges on foreign exchange when UK investors buy US stocks, and Robinhood promises 24/5 trading availability.

After failing in 2020 and an unsuccessful bid to buy Ziglu, a UK trading app, Robinhood successfully launched in the UK, as announced last year. Following this, it also expanded into the EU with cryptocurrency trading services.

Shortly after Robinhood’s UK market entry, Public.com, a competing US broker, exited the UK market only eight months into its operation.