Robinhood Launches 24-Hour Stock Trading Amid Clamor for Parity with Cryptos

Robinhood (NYSE: HOOD) would launch 24-hour stock trading to the US on limited stocks and ETFs beginning next week. The move would help bring parity with digital assets like cryptos that trade 24/7.

To begin with, Robinhood would allow selected users the option to trade in 43 securities which includes popular and heavily traded names like Tesla and Apple between 8 pm ET on Sunday to 8 pm ET on Friday.

Users would be able to place limit orders only beyond the normal market hours. Notably, Robinhood has been contemplating 24-hour trading for quite some time now, and last year it started offering “hyper-extended hours” which increased the trading window in pre and post-markets.

Robinhood said that it would roll out the feature to all users by the next month and would subsequently work on 24/7 stock trading.

“It’s the next step in evolving the market to how it should work, which is 24/7, and more like a piece of software rather than a brick-and-mortar institution that’s tied to U.S. East Coast working hours,” said Robinhood CEO Vlad Tenev in an interview.

Through the 24/5 trading feature, Robinhood has become the first brokerage to offer 24-hour stock trading in the US.

Robinhood to Launch 24-Hour Trading from Next Week

During the earnings call for Q1 2023, Tenev said that while the company’s trading volumes increased after the launch of hyper-extended hours, it is “probably a little bit early to, to give estimates for what we’d see in terms of volumes” with the 24/5 trading feature.

Notably, Robinhood’s growth has come down significantly as retail trading volumes have plummeted, and with the 24-hour trading, the company might want to revive its sagging growth.

HOOD reported revenues of $441 million in the first quarter of 2023 – up 16% as compared to the fourth quarter.

Of these, transaction-based revenues were $207 million which was 11% higher than the previous quarter. While the company’s options and equities revenues rose 7% and 29% respectively, cryptocurrency revenues fell 1% as compared to the fourth quarter.

• Read our guide on investing in cryptocurrencies

Meanwhile, Robinhood generated net interest income of $208 million in the first quarter which was 25% higher than the previous quarter – thanks to the rise in US interest rates.

Retail Trading Volumes have Fallen

While Robinhood is an online trading company for all practical purposes it got more revenues from interest income as compared to trading during the first quarter.

Robinhood’s trading volumes are way below what they were in 2021 when it went public.

In Q2 2021, which was the first quarter when Robinhood reported results as a publicly-traded company, its transaction-based revenues were $451 million – of this, $233 million came from cryptocurrencies alone.

That quarter, the company earned more revenues from crypto trading than stocks and options combined.

Robinhood’s revenues peaked in the second quarter of 2021. That quarter, it benefited from the frenzied trading in meme stocks as well as meme cryptocurrencies. The meme stock mania has since faded.

Meanwhile, Robinhood’s MAUs (monthly active users) rose by 0.4 million to 11.8 million in the quarter. The company’s MAUs fell for six straight quarters prior to Q1 2023 – and like the revenues – the MAUs also peaked at 21 million in Q2 2021.

However, Robinhood continues to post losses and in Q1 2023 it lost $511 million making it the seventh consecutive quarter of loss.

All said Robinhood is quite upbeat about the 24/5 trading feature with Tenev saying during the earnings call that he is “excited” about the next week’s launch.

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