Robinhood launches margin investing for UK clients
Robinhood launches margin investing for UK clients
Robinhood, the popular trading platform known for democratizing finance, has announced the launch of margin investing for its clients in the UK. This new feature allows users to borrow funds from Robinhood to increase their purchasing power, enabling them to buy more securities by using their current investments as collateral.
The introduction of margin investing in the UK is significant, as retail investors have traditionally faced barriers to accessing this type of service. Historically, margin investing has been available primarily through large brokerage firms that often cater to wealthier clients, leaving many everyday investors with fewer options. High fees and restrictive terms have been common obstacles. Robinhood's move aims to change this by offering competitive rates, making margin investing more accessible to regular investors.
For clients approved for margin trading, Robinhood offers tiered rates based on the amount borrowed. The rates start at 6.25% for amounts up to $50,000 and decrease as the loan size increases. For instance, the rate for loans exceeding $1 million is 5.50%, dropping to 5.20% for balances over $50 million. These rates are among the lowest in the market, giving UK clients more flexibility to grow and diversify their portfolios without the traditionally high costs associated with margin borrowing.
“With the launch of margin investing, we’re giving our UK clients even more flexibility and tools to enhance their investment strategies. At Robinhood, we understand that investors want access to expand and diversify their portfolios at industry-leading rates, with an amazing user experience,” emphasized Jordan Sinclair, president of Robinhood UK.
Since the launch of the Robinhood UK app earlier this year, the platform has already made a splash by eliminating commission fees and foreign exchange fees, making trading more accessible. Clients have also appreciated additional protections, such as $2.5 million FDIC insurance for uninvested cash through the Brokerage Cash Sweep program. The addition of margin investing builds on these benefits, giving clients more opportunities to manage and grow their investments efficiently.
While margin investing offers increased purchasing power, it is not automatically available. Clients must apply and meet eligibility requirements to access margin trading. Once approved, their rates will be automatically adjusted based on the size of their margin loan balance.
Robinhood has already begun rolling out margin investing for UK clients, with full availability expected in the coming weeks. Interested users can apply for access through the Robinhood app, where the entire process takes just a few minutes.
Earlier, we reported that Robinhood reached a significant milestone with its retirement product, Robinhood Retirement, gathering $10 billion in assets under custody (AUC) in less than two years since its launch.
Read also: Swissquote expands trading capabilities with a new portfolio
