Robinhood’s Stock Taking a Breather – UK Clients To See Options Trading Next Year

Robinhood's stock (NASDAQ: HOOD) has been a favourite for trading this year, with growth of almost 200% on a year-to-date basis, despite a recent pullback. HOOD is down 5.82% through this morning's pre-market, having already retreated some 15% from recent 52 week highs. This put's Robinhood in correction territory.

The stock's trajectory on the chart over the past 12 months makes particularly good viewing for the bulls, and despite the short term breather, the company is poised to expand its offering into new services and territories in the coming year, with many wondering just how diverse the platform may become in years to come. This could help to bring new revenue streams online.

UK clients can expect to see Robinhood adding options trading at the beginning of 2025. This move aligns with Robinhood’s strategy to strengthen its international presence and diversify the range of financial features available to its users.

Robinhood’s entry into the UK market began with the launch of its trading platform in March 2023. Continuously expanding its offerings, Robinhood introduced margin investing in October and share lending in September. These services allow users to borrow against their holdings and earn passive income by lending their stocks respectively.

Jordan Sinclair, President of Robinhood UK, confirmed the options trading launch, stating it is set for “the beginning of next year.” Importantly, Robinhood has secured approval from the Financial Conduct Authority (FCA), enabling the planned roll-out of options trading in the UK. Options trading, a notable feature in Robinhood’s American operations, allows investors to buy or sell financial contracts. It provides the right to transact an investment at a predetermined price within a specific timeframe.

Robinhood's decision to introduce options trading follows a period of robust growth. The company recorded a 36% increase in total net revenues, totaling $637 million. Options trading alone contributed significantly, with revenue surging by 63% to $202 million. Moreover, Robinhood’s customer base grew to 24.8 million users as of November 2023, reflecting a year-on-year increase of approximately 1.5 million.

Despite these expansions, Robinhood has not yet included cryptocurrency trading in its UK services. CEO Vlad Tenev recently highlighted the UK's policy on crypto and margin trading as somewhat lagging. However, cryptocurrency trading remains a lucrative area for the company, with a 165% revenue increase contributing $61 million to its total revenue.