Robinhood 24-Hour Market Faces Overnight Trading Suspension

Cryptocurrency-friendly stock trading app Robinhood encountered a suspension of its 24-hour market’s execution venue, Blue Ocean ATS (BOATs), for overnight trading on August 6. The suspension lasted from 12:00 am UTC to 8:00 am UTC, causing significant inconvenience for users who rely on the platform for after-hours trading.

AskRobinhood, the support account for Robinhood, announced about this halt on the social media platform X. The message advised consumers to put orders for other trading sessions even as they might revoke their current orders at any moment. It was clarified that all open trades as of midnight would be processed around eight hours later.

With several individuals complaining online, this recent suspension followed another reported overnight stop by BOATs on the day before. These suspensions fell in line with a global stock market collapse.

Robinhood’s Risk Control

Launched in May 2023, Robinhood’s 24-hour market service allows users to trade beyond the standard market hours. This service uses BOATs to facilitate overnight trading orders. According to Robinhood’s support page, BOATs employs its own risk controls to prevent stocks from trading more than 20% above or below the price set near the end of an extended hours trading session.

The suspension of overnight trading on Robinhood was not an isolated incident. Social media reports indicated that other brokerage platforms, including Charles Schwab, Fidelity, Vanguard, TD Ameritrade, E-Trade, UPS, and CenturyLink, also experienced trading outages due to the stock market volatility.

Community Reacts

Investors clearly were unhappy, and many turned to X to voice their discontent. One user questioned the legitimacy of the suspension, claiming that it was arbitrary for Robinhood to stop trading during difficult times without a clear explanation.

Calls for regulatory scrutiny were also made, with some investors urging United States regulators to investigate whether the trading halt was in line with U.S. laws. The lack of transparency and the impact on traders’ investments added to the growing frustration.

Ongoing Regulatory Struggles

It is worth noting that Robinhood has been under regulatory scrutiny. In May, the company received a Wells Notice from the U.S. Securities and Exchange Commission (SEC) regarding its token listing. A Wells Notice signifies that the SEC staff has completed its investigation and is considering enforcement action against the company.

At the time, Robinhood CEO Vlad Tenev criticized the SEC’s regulatory approach, emphasizing the importance of providing Americans with access to cryptocurrencies as they continue to gain popularity.