Robinhood launches in the UK with inexpensive US trading to attract customers

As part of an international expansion plan to "democratise finance" and increase access to markets, trading app operator Robinhood Markets announced on Thursday that it will launch brokerage services in the United Kingdom.

When mum and dad investors were drawn to Robinhood's commission-free platform in 2021 to invest in so-called "meme stocks" during pandemic era, the company captured the attention of millions of people.

Since that period, there has been a decline in trading activity as more Americans struggle with rising interest rates, high levels of inflation, and a cost of living crisis.

As a hub for innovation, global finance, and tech talent, the UK was described by Robinhood's CEO and co-founder as the "ideal place" for the company to launch its first international brokerage product.

According to Robinhood, UK clients will be able to trade over 6,000 US-listed stocks and American Depositary Receipts (ADRs) commission-free, with no minimum account amount required and no foreign exchange fees.

The US Federal Deposit Insurance Corporation insures accounts up to a total of $2.25 million, and Robinhood said that customers could earn an equivalent 5% annual rate on uninvested cash.

Following a slowdown in trading activity, the online brokerage missed Wall Street estimates for Q3 revenue earlier this month, which caused its shares to drop more than 9% in extended trading.

At $185 million, Robinhood's transaction-based revenue fell 11% from the previous year. From a year ago, the number of monthly active users decreased by 16% to 10.3 million.

(Sources: investing.com, reuters.com)