Robinhood Temporarily Halts Overnight Trading Amid Execution Venue Issues

Robinhood Temporarily Halts Overnight Trading Amid Execution Venue Issues

Robinhood has announced a temporary suspension of its overnight trading services due to issues with its execution venue, Blue Ocean ATS. The company revealed this disruption in a recent post on X, attributing the suspension to problems faced by Blue Ocean ATS, the third-party firm managing round-the-clock trading for Robinhood.

“Robinhood 24 Hour Market’s execution venue, Blue Ocean ATS (BOATS), has suspended overnight trading for tonight. 24 Hour Market orders that are open as of approx. 8 PM ET will be routed for execution starting at approx. 4 AM ET tomorrow. You may cancel your order at any time and can still place an order for another trading session,” Robinhood stated.

Capacity Issues and System Migration

A spokesperson for Blue Ocean ATS told CNBC that the firm experienced capacity issues the previous evening, leading to the cancellation of a small percentage of trades. To address these challenges, Blue Ocean ATS plans to migrate to a new technology system within the next two weeks.

This announcement from Robinhood follows a day marked by technical difficulties for several brokerage firms, including Charles Schwab, which temporarily prevented some users from accessing their accounts. Monday’s market turbulence saw the Dow Jones Industrial Average plummet over 1,000 points, while the S&P 500 endured its worst day since 2022.

Robinhood’s 24/5 Trading Service

Robinhood launched its “24/5 trading” service in May 2023, enabling users to trade from 8 p.m. ET on Sunday to 8 p.m. ET on Friday. Overnight trading is typically restricted to the most liquid stocks and ETFs. It remains unclear whether the suspension will extend beyond early Tuesday morning or if other brokerage firms offering overnight trading will be similarly affected.

Social media reports indicate that Robinhood was not the only platform experiencing issues due to stock market volatility. Other brokerage platforms, including Charles Schwab, Fidelity, Vanguard, TD Ameritrade, E-Trade, UPS, and CenturyLink, also reported trading outages.

Surge in Crypto Trading Volumes

Despite these recent challenges, Robinhood has seen a substantial increase in crypto trading volumes during the first quarter, with a 224% surge to reach $36 billion. This growth significantly contributed to the company’s transaction-based revenue, which rose 59% year-over-year to $329 million. Crypto-related revenue alone saw a substantial 232% increase, reaching $126 million.

The surge in crypto trading volumes on Robinhood’s platform reflects broader trends in the market, as other publicly traded crypto peers, such as Coinbase, have also reported impressive first-quarter performances due to improving market conditions.

Earlier this year, Robinhood disclosed that it had received a Wells Notice from the U.S. Securities and Exchange Commission (SEC) regarding its crypto unit. A Wells Notice informs the recipient that the regulator has concluded an investigation and plans to file an enforcement action. The SEC has previously issued Wells Notices to major industry players like Uniswap and ConsenSys.

Robinhood’s temporary suspension of overnight trading underscores the ongoing challenges and volatility within financial markets, while the company’s strong performance in the crypto sector highlights its resilience and growth potential amidst regulatory scrutiny.

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