Robinhood’s 24-Hour Trading Suspension: Unpacking the Issues and User Complaints

Introduction

Robinhood, the cryptocurrency-friendly stock trading app, encountered a significant disruption when its 24-hour market’s execution venue, Blue Ocean ATS (BOATs), was suspended for overnight trading on August 6. Robinhood’s support account, AskRobinhood, posted on X (formerly Twitter) to inform users about the halt from 12:00 am UTC to 8:00 am UTC on August 6. While traders were given the option to cancel their orders at any time, open trades as of 12:00 am UTC were delayed for execution until around eight hours later.

Robinhood Allegedly Halted 24-Hour Trading for Two Days in a Row

The recent trading suspension came on the heels of another alleged overnight BOATs suspension on the day prior, with multiple users reporting issues on August 5. This incident coincided with a global stock market decline, notably seeing Japan’s Nikkei suffer its most significant drop since Black Monday in 1987.

Despite the reports, Robinhood didn’t explicitly confirm the halt to Cointelegraph on August 5, maintaining that the platform was operational at the time. “Our overnight trading session is currently operating,” a Robinhood spokesperson commented.

Introduction of Robinhood 24-Hour Market Service

Launched in May 2023, Robinhood’s 24-hour market service allows users to invest outside traditional trading hours. For this service, Robinhood relies on Blue Ocean ATS to facilitate overnight trading orders. According to Robinhood’s support page, BOATs has its own risk controls to prevent stocks from trading more than 20% above or below the price set during extended hours trading.

“Public exchanges have similar controls to prevent extreme price movements during market hours, including limit up and limit down halts […]. This means individual securities in the 24-hour market won’t trade outside these pricing bands. BOATS may also reject orders with limit prices outside these price bands,” the support page elaborates.

Broader Market Impact

Robinhood wasn’t alone in experiencing trading issues due to market volatility. Platforms such as Charles Schwab, Fidelity, Vanguard, TD Ameritrade, E-Trade, UPS, and CenturyLink also reportedly faced trading outages.

Multiple Robinhood Users Complain About Canceled Trades

Numerous disgruntled investors took to X to voice their frustrations over canceled trades following Robinhood’s suspension announcement.

“What about my shares of Nvidia that I purchased last night, which were up nearly 10% before you clawed them back this morning?” one user, @YodasMaster13, posted on X. The user shared a screenshot of an email from Robinhood indicating that all trades executed during the suspension would be “canceled due to an issue experienced by Blue Ocean ATS.”

Regulatory Concerns

Some investors also called on U.S. regulators to investigate whether the trading halt was legal. Another user questioned the legality of the halt, expressing concerns about the unexplained turn-off of the 24-hour trading execution.

One frustrated investor claimed to have lost $500 due to the BOATs suspension and stated that the platform had “zero record” of their purchases during the suspension period. “I wonder what FINRA would have to say about stealing my profits,” the user remarked.

Cointelegraph reached out to Robinhood for a comment on the latest halt, but no response was received at the time of publication.

Conclusion

The recent suspension of Robinhood’s 24-hour trading by Blue Ocean ATS has sparked considerable user frustration and regulatory concerns. Given Robinhood’s significant role in democratizing trading access, such interruptions and their subsequent handling are crucial points of interest for both its user base and regulatory bodies.

FAQs

Q: What is Blue Ocean ATS?
A: Blue Ocean ATS (BOATs) is an alternative trading system used by Robinhood to execute overnight trading orders in its 24-hour market service.

Q: Why did Robinhood suspend overnight trading?
A: The suspension was due to an issue with Blue Ocean ATS, the execution venue for Robinhood’s 24-hour trading. Specific details about the nature of the issue have not been disclosed.

Q: Can users cancel their orders during the suspension?
A: Yes, users were informed that they could cancel their orders at any time. However, any open trades as of 12:00 am UTC were automatically delayed for execution for about eight hours.

Q: Are other trading platforms also experiencing similar issues?
A: Yes, other platforms such as Charles Schwab, Fidelity, Vanguard, TD Ameritrade, E-Trade, UPS, and CenturyLink have also experienced trading outages amid recent market volatility.

For more insights into stock trading and market regulations, you can refer to U.S. Securities and Exchange Commission (SEC) and Financial Industry Regulatory Authority (FINRA).

In conclusion, while Robinhood’s innovative 24-hour trading service aims to provide broader trading opportunities to its users, the recent disruptions underscore the need for robust and transparent operational protocols to maintain user confidence and regulatory compliance.