Robinhood rolls out margin trading in the UK after regulator nod

From CNBC: 2024-10-21 03:13:34

Robinhood is launching margin investing in the U.K., allowing users to borrow cash to enhance trades. This move follows the recent approval by Britain’s financial regulator, the FCA. The platform offers competitive interest rates on margin loans, ranging from 6.25% to 5.2%. Other firms offering margin investing in the U.K. include Interactive Brokers and IG.

Investing on borrowed cash can be risky with margin trading, as investors leverage their trades. Robinhood had been in talks with the FCA before launching in the U.K. The platform requires a minimum $2,000 cash deposit for margin trading and customers must opt in. Customer protection includes $2.5 million of uninvested cash insured by the FDIC.

Jordan Sinclair of Robinhood U.K. noted that many customers feel excluded from advanced trading tools like margin trading. The platform aims to simplify access to investing tools and break down barriers for all customers. With margin investing, customers can diversify and expand their portfolios with the right strategy.

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