Online trading firm Robinhood is preparing to launch a securities lending service for retail investors.
The company, which rose to prominence during the pandemic-induced boom in online stock trading, has claimed that its new venture will adopt a “democratised approach to fully-paid securities lending”.
“Our version of stock lending empowers customers to put their investments to work while keeping it simple,” said Steve Quirk, Chief Brokerage Officer at Robinhood.
“Robinhood does the work of finding borrowers and managing transactions while customers can add a potential source of passive recurring income to their portfolio.”
The service is currently available to a small set of customers but should be rolled out to all customers by the end of May, according to a statement.
The move comes just weeks after Robinhood acquired London-based crypto company Ziglu as part of its strategy to enter the UK market.
It also comes on the back of a significant drop in transactional revenue, which made up over 75% of the firm’s first quarter revenue but was still down by 48% on last year’s figures.
Consequently Robinhhood is looking for alternative sources of revenue. In March the company extended its trading hours and in late April, it launched a cry[to wallet for customers.