American Invest Hub
  • Politics
  • Investing
  • Business
  • Latest News

American Invest Hub

  • Politics
  • Investing
  • Business
  • Latest News
Investing

Robinhood launches high-risk margin trading in UK following regulatory approval

by admin October 21, 2024
October 21, 2024
Robinhood launches high-risk margin trading in UK following regulatory approval

Robinhood has announced the launch of margin trading in the UK, enabling investors to borrow funds to amplify their trades. This development, which follows the platform’s discussions with the Financial Conduct Authority (FCA), will allow UK users greater access to advanced investment tools traditionally reserved for a select group of high-net-worth individuals.

The new margin trading option allows UK users to leverage their existing assets as collateral to acquire additional securities.

Unlike many UK platforms that restrict margin trading to high-net-worth clients, Robinhood’s initiative seeks to democratize access to this trading strategy.

Competitors offering similar services include Interactive Brokers, IG, and CMC Markets, but margin trading remains relatively uncommon in the UK due to regulatory concerns about the risks involved.

Robinhood’s foray into margin trading follows the introduction of a securities lending product in September, which enables users to earn passive income on their stock holdings. The platform is promoting “competitive” interest rates for its margin loans, which range from 6.25% for loans up to $50,000 to 5.2% for loans of $50 million and above.

Jordan Sinclair, president of Robinhood UK, emphasized the platform’s mission to dismantle barriers to entry for everyday investors.

“There are so many barriers to entry,” Sinclair stated in an interview with CNBC.

Ultimately, we want to break down those stigmas and barriers to basic investing tools.

He added that for the right customers, margin trading can be an effective way to diversify and expand their portfolios.

However, margin trading carries inherent risks, particularly for retail investors.

By using borrowed funds, traders can amplify their investments; for instance, a $10,000 investment in Tesla could be made with only $1,000 upfront if using 10x leverage.

While this strategy can yield substantial returns in a rising market, it also increases the potential for significant losses if asset values decline.

Robinhood initially launched in the UK last November but was unable to offer margin trading until now due to regulatory discussions.

Sinclair explained that gaining the FCA’s confidence involved demonstrating the platform’s US product history and eligibility criteria.

To mitigate risks for users, Robinhood has established stringent safeguards, requiring a minimum deposit of $2,000 in cash for margin trading and ensuring that customers voluntarily opt into the service.

Sinclair reassured potential users that Robinhood’s customers’ uninvested cash is protected up to $2.5 million by the Federal Deposit Insurance Corporation (FDIC), providing an added layer of security for users navigating the complexities of margin trading.

With this launch, Robinhood aims to make margin trading accessible to a broader audience in the UK, positioning itself as a competitive player in the international trading market.

The post Robinhood launches high-risk margin trading in UK following regulatory approval appeared first on Invezz

0
FacebookTwitterGoogle +Pinterest
previous post
Waaree Energies IPO 2024: Is this Indian solar panel maker a good investment?
next post
Kinder Morgan stock is surging: can the rally continue?

Related Posts

NZD/USD analysis: here’s why kiwi could crash below...

April 9, 2025

Starwood Property: STWD could reverse as risky patterns...

October 26, 2024

How Would a New BRICS Currency Affect the...

February 16, 2024

Ethereum price analysis: does ETH has more upside?

December 9, 2024

Joby Aviation stock price is rising: is it...

November 25, 2024

Stoxx 600 index top laggards and gainers in...

December 29, 2024

Top cryptocurrencies to watch: Sonic, XRP, Cardano, Solana

April 13, 2025

Daydream-2 Program to Recommence in Two Weeks

July 18, 2024

Top crypto coins to buy as the DXY...

March 10, 2025

Bitcoin price prediction: The long-term bullish case for...

December 15, 2024

    Stay updated with the latest news, exclusive offers, and special promotions. Sign up now and be the first to know! As a member, you'll receive curated content, insider tips, and invitations to exclusive events. Don't miss out on being part of something special.


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest News

    • Interview: Strategic location gives Brazil Potash cost advantage in domestic fertiliser market, says CEO Matt Simpson

      June 1, 2025
    • Canada’s Q1 GDP expands by 2.2%, driven by exports spike ahead of potential US tariffs

      June 1, 2025
    • President Trump to host farewell for Elon Musk as DOGE leader steps away

      June 1, 2025
    • UK’s digital banks face divergent fortunes: Starling stumbles, Monzo and Revolut soars

      June 1, 2025
    • Trump wants Apple to shift iPhone production from India to the US: here’s what it means

      May 18, 2025

    Categories

    • Business (3,022)
    • Investing (2,459)
    • Latest News (1,994)
    • Politics (1,530)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: americaninvesthub.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 americaninvesthub.com | All Rights Reserved