A Quarter of Robinhood’s Trading Volume Often Comes After Hours

Paige Smith, Bloomberg News

The Robinhood logo on a smartphone in New York on May 8, 2023. , Photographer: Gabby Jones/Bloomberg

(Bloomberg) -- Robinhood Markets Inc. is seeing as much as 25% of total trading volume coming outside of traditional market hours as investors take advantage of extended days on the retail-brokerage platform.

Consumers have traded more than $10 billion in volume overnight since Robinhood launched its 24-hour, five-day-a-week trading capabilities last May — data the firm hasn’t previously announced. Robinhood defines “overnight” as between 8 p.m. and 7 a.m. in New York from Sunday through Friday, and a fourth of trading now takes place outside standard market hours on the platform’s busiest days, the company said.

“For a lot of the customers here, the notion that they have to wait for somebody to ding a bell two times a day to transact is very foreign to them,” Steve Quirk, Robinhood’s chief brokerage officer, said in an interview. “When the market isn’t open, it’s frustrating to them to not be able to transact when they want to transact.”

Other retail brokerages, including Charles Schwab Corp. and Interactive Brokers Group Inc., also allow customers to trade outside the traditional market hours of 9:30 a.m. to 4 p.m. in New York in some capacity. Access to pre- and post-market trading gives investors the opportunity to quickly react to news events or other market-moving incidents, and to adjust their positions accordingly.

“Over the past several weeks and months, we’ve seen a significant shift in 24 Hour Market trading activity and a notable increase in adoption by Robinhood customers outside of traditional market hours,” the firm said in a blog post Wednesday.

Robinhood said the most overnight volume came on the evening of March 3 into the morning of March 4 — an increase pegged to news that Super Micro Computer Inc. would join the S&P 500, Quirk said.

On a typical day, around 15% to 20% of trading takes place outside standard market hours. Investors can trade 922 stocks overnight in the US, including Apple Inc., Amazon.com Inc. and Tesla Inc.

“Every single month it’s continued to grow,” Quirk said of customers trading early and late.