US investing app Robinhood is today (Monday) beefing up its UK offering, adding a form of trading in which investors borrow money to make bigger trades. Robinhood, which disrupted the US investing market with commission-free trading, said it’s launching margin trading “with some of the most competitive rates in the industry”.

The app, popular with younger traders, is also gearing up to launch savings products, such as Isas and Sipps, and UK equities, in the UK, as it looks to become an all-encompassing investment app. In September this year, it launched stock lending in the UK.

Margin trading is a risky form of trading which allows investors to borrow money to make potentially bigger gains and bigger losses.

Jordan Sinclair, Robinhood UK president, said that for Robinhood’s more advanced and active US customers, margin trading is “fundamental” to their investment strategy. Sinclair said Robinhood was bringing margin trading from the US to the UK, following customer demand.

He said:

“That’s where we start. What are our customer needs? That’s what we heard from them loud and clear in March and still do and it is ‘We want more of what you are offering your US customers Bring it here.’”

The US investing app had planned to launch margin trading when it launched in the UK in March this year, but pulled it launch, amid discussions with the FCA, the UK regulator.

Sinclair said:

“When you bring a new product to the UK, I think the important part is just to work with the regulators. 

“Yes, it took a little bit of a time. But you know what at the end of the day, you want a product that is right for UK customers.”

In 2021, Robinhood was fined more than $70m by US regulators for issues that included providing misleading information on margin trading. Sinclair declined to comment on the fine, saying it was before his time. However, he added: “All types of events like that, we learn and develop as a business and mature.”

Robinhood, which has over 20m customers and in 2023 reported $1.86 billion in revenues, will be hoping its new investment tool will be a big success in the UK. It argues traditional brokerage firms often impose high fees and reserve competitive rates for the ultra-wealthy, leaving everyday investors with limited options when it comes to margin trading. In another move, Robinhood is looking to tie up with UK universities to provide financial education.

Sinclair added:

“Universities are somewhere we are looking to get involved, we have done some of that in the US already. But we want to do it in a UK way, so it’s slightly different.”

Along with its UK expansion, Robinhood is also looking to be a player in the EU crypto market, after snapping up European exchange Bitstamp for $20m earlier this year.