Robinhood Introduces a Stock Lending Program

The software will not accept fractional shares.

In order to do this, the business intends to “democratize” access to fully compensated securities funding.

Robinhood, a popular US commission-free stock trading and investing app, announced the formal launch of the Stock Lending program on Wednesday. According to a blog post published by the site, Robinhood intends to take a “democratized approach” to paid securities lending.

By activating Stock Lending, a Robinhood member may lend out fully paid equities from their account. Customers may monitor their profits, see their holdings, and activate or cancel Stock Lending at any moment using Robinhood's in-app dashboard.

“Our form of Stock Lending enables clients to put their savings to work while remaining easy.” Customers may add a possible source of passive recurring income to their portfolio while Robinhood performs the work of sourcing borrowers and processing transactions. “We're pleased to knock down yet another barrier and democratize a product that has traditionally been reserved for the rich with high entry hurdles,” said Steve Quirk, Chief Brokerage Officer at Robinhood.

“Fully compensated securities lending is a demand-driven business,” according to Robinhood, “which means that assets with limited availability have a larger potential to be leased out and the potential to give higher returns than securities with more liquid supply.”

However, fractional shares and shares held in an account with a margin balance are ineligible for loaning under the Stock Lending program.

Ziglu Purchase

Robinhood said last month that it has struck a deal to buy Ziglu, a London-based fintech app. Following the purchase, the platform is prepared to expand into the United Kingdom and Europe, following previous plans to do so that were shelved more than a two-year period ago.

As Robinhood has said, Ziglu believes that the new age of digital money will bring forth an abundance of alternatives, and that Ziglu's mission is to make such alternatives available to everyone. “Ziglu, like Robinhood, believes that the new age of digital money brings with it a plethora of options,” says the company. A statement from the stock trading and investing app said that “their exceptional personnel and cutting-edge technology will help us in speeding our international expansion, both in the United Kingdom and across Europe.”