Robinhood Markets Inc. HOOD has made significant strides in its 24-hour market trading initiative, with the trading volume nearing $30 billion, despite recent technical challenges.
What Happened: The 24-hour market trading feature, which allows users to trade select stocks and ETFs outside of traditional market hours, has been well-received by Robinhood’s user base. CEO Vlad Tenev announced the approaching $30 billion trading volume during the second-quarter earnings call.
“We are nearing $30 billion in volumes since launch in the overnight hours, and we are really excited because this product is one of the reasons why we believe that customers would be advantaged on Robinhood,” he said.
Despite the feature’s popularity, it has faced challenges. An outage in the 24-hour trading system occurred just before the earnings call, attributed to a third-party provider, Blue Ocean ATS, unable to handle the high demand. Tenev assured investors that the company is working to improve the system’s reliability and scalability.
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Despite the setback, Robinhood remains committed to the 24-hour trading feature, viewing it as a key differentiator in the competitive brokerage landscape.
The success of the 24-hour trading option aligns with Robinhood’s broader strategy to win the active trader market, one of the company’s three primary focus areas alongside increasing wallet share with customers and expanding internationally.
Why It Matters: Robinhood’s 24-hour trading feature has faced multiple challenges since its inception. In April, the platform reportedly halted 24-hour trading, causing a stir on social media. Finance influencer Amit noted that the halt was due to market intensity and was a normal occurrence for such a product.
Despite these setbacks, Robinhood’s second-quarter earnings report showed strong financial performance, with a 40% year-over-year increase in revenue, reaching $682 million. The company also saw a significant rise in crypto revenue and a growing number of Gold subscribers.
Additionally, on the same day as the recent outage, Cathie Wood‘s Ark Invest made significant trades in Robinhood shares, among others, amid a substantial market downturn.
Price Action: Robinhood stock closed at $17.12 on Wednesday, down 0.52% for the day. In after-hours trading, the stock rose 2.22%. Year to date, Robinhood’s stock has gained 38.40%, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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