High risk futures trading is now available to retail investors via Robinhood

Trading platform Robinhood has announced that it will launch futures trading in the UK, allowing customers to trade index, energy, metals and foreign exchange futures.

Futures are contracts traded on an exchange that represent agreements to buy or sell assets at a fixed price at a future date.

They allow traders to profit from future price changes, or to hedge against market volatility. 

The firm said platform users will be able to trade these products directly on the Robinhood app and on Robinhood Legend, its advanced desktop trading platform.

The broker will give customers access to more than 40 CME group futures products, such as futures on the S&P 500, oil and gold.

The products, which Robinhood said will be rolled out over ‘the coming weeks,’ will come with a $0.75 contract fee for each trade, while the firm will offer real-time market data for no extra cost.

Traders may also be charged regulatory fees and exchange fees, it said.

New offering: Robinhood says futures products will be available to trade 24 hours a day, across indices, energy, foreign exchange and metals

Jordan Sinclair, president of Robinhood UK, said: ‘In the UK, futures trading has traditionally been seen as the preserve of institutional investors, with limited resources to help retail traders get started.

‘Today, we start changing that. We’re introducing futures trading in the UK with an intuitive mobile experience, smarter tools, education and insights and some of the lowest fees in the industry.’

Robinhood says futures products will be available to trade 24 hours a day, across indices, energy, foreign exchange and metals.

Futures are a high-risk investing instrument, as traders lose money if prices are lower at expiration than the price in the futures contract.

Robinhood isn’t the first platform to offer futures to retail traders, with futures products also offered by the likes of IG, Saxo and Etoro. 

The firm said customers will have to be approved in order to be allowed to trade futures.

‘Futures offer retail traders a fully transparent, cost-effective way to participate in some of the most liquid markets in the world,’ Julie Winkler, chief commercial officer at CME Group said.

‘We are pleased to work with Robinhood to educate and empower their UK customers to access these new opportunities.’

Robinhood, which only offers trading of US products, is aggressively expanding its operations in the UK as it looks to compete with established names in the UK.

In the summer, Robinhood launched an AI product ‘digests’, which offers explanations of stock price changes, using Robinhood Cortex, its AI investing assistant.

Earlier this year, Robinhood launched options products, stock lending and margin investing, allowing customers to leverage their trades.

‘I do look at the UK market, and it feels a lot like the US did 10 years ago,’ Sinclair previously told the Financial Times.

‘You don’t need to have a Hargreaves Lansdown account and pay £11.95… to trade. That’s the old world.’

The platform has also previously suggested that it aims to launched a fee-free stocks and shares Isa before the end of the 2025 financial year.