Robinhood launches options trading for UK customers
Robinhood (NASDAQ: NASDAQ: HOOD ) has expanded its platform for UK investors by launching options trading. This move comes as retail investors show growing interest in alternatives to traditional stock trading, especially in the UK, where such options have been less accessible.
Options trading enables investors to buy or sell options, which are contracts granting the right, but not the obligation, to buy or sell an asset at a set price within a certain period. Deriving their value from an underlying asset like a stock or index, these derivatives offer various strategies for investors to hedge, generate income, or speculate on market movements.
Robinhood UK President Jordan Sinclair had previously indicated in a December interview with Yahoo Finance UK that the platform was planning to introduce options trading at the start of the new year. As part of the launch, Robinhood announced there would be no contract fees for orders placed until 4:59 am BST on May 17, 2025. Afterward, a contract fee of $0.50 will apply, along with other costs.
The platform's approach to options includes both "calls," allowing the purchase of an asset at the strike price before expiration, and "puts," permitting the sale of an asset at the strike price. While options can be more cost-effective than direct asset purchases and provide a form of investment loss insurance, they also come with complex terminology and require active management.
To access options trading on Robinhood, UK customers must pass an appropriateness test, demonstrating sufficient experience and knowledge. This eligibility criterion underscores the platform's emphasis on informed trading practices.
The introduction of options trading precedes the company's fourth-quarter earnings report, scheduled for release on February 12. Robinhood's previous quarterly results highlighted a significant increase in options contracts in the US, with a 47% year-on-year rise and a total of 1.2 billion contracts traded year-to-date at that point.
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