Robinhood is launching a desktop platform and adding futures and index options trading to the app

By Manya Saini and Niket Nishant

(Reuters) – Robinhood launched its long-awaited desktop platform on Wednesday and added futures and index options trading capabilities to its mobile app, as the fintech firm looks to take market share from traditional brokers.

The commission-free trading app, which has been around for eleven years and became synonymous with small investors in 2021, now wants to mature into a full-fledged financial service provider and compete with established brokerage houses that serve institutional investors.

The Menlo Park, California-based company said its desktop trading platform, called “Robinhood Legend,” will focus on active traders.

“We have matured along with our customers and have heard loud and clear that they want access to more advanced products and more active trading tools,” Steve Quirk, chief brokerage officer, told Reuters.

“Our long-term goal is to make Robinhood the leading financial services company that meets all customer needs.”

Available at no additional cost, the platform offers advanced trading tools, real-time data, and custom and preset layouts.

Meanwhile, the app allows users to trade futures on the benchmark S&P 500 index, oil and Bitcoin, among others. Customers can also trade index options

FIGHT FOR MARKET SHARE

The U.S. brokerage industry, long dominated by big names like Vanguard, Charles Schwab and Fidelity Investments, experienced its first disruption in decades when Robinhood introduced commission-free trading in 2013.

A decade later, Robinhood is expanding to appeal to more sophisticated investors. Futures and options trading has typically been the domain of large banks, hedge funds and asset managers due to higher margin requirements, increased volatility, complexity and commissions.

Subscribers to Robinhood's Premium Gold tier can trade futures for as little as 50 cents per contract, while non-Gold users must pay a commission of 75 cents.

This compares to Schwab's fees of $2.25 per contract, while Morgan Stanley's E*TRADE charges $1.50 for futures and $2.50 for crypto futures.

Robinhood's index options fees, set at 35 cents per contract for Gold members and 50 cents for others, are also lower than industry peers.

As of June 30, the company had 11.8 million monthly active users and 1.98 million Premium Gold customers.

Analysts have previously said Robinhood's entry into futures trading this year could be met with some caution by retail traders if it charges a fee, but it could also create new opportunities to expand its market share.

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Earlier this year, the company committed to increasing margins while focusing on driving “profitable growth” in 2024. Three consecutive quarters of reported earnings have also boosted investor enthusiasm, contributing to a stock gain of over 100% year-to-date.

(Reporting by Manya Saini and Niket Nishant in Bengaluru; Editing by Shailesh Kuber)