WEBVTT - Robinhood Markets CEO Vlad Tenev Talks Market & Hood Summit

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>Now we're going to head to that Hood summit because

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<v Speaker 2>robin Hood's first ever consumer focused summit here is underway

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<v Speaker 2>in Miami. The retail brokerage announced a host of new features,

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<v Speaker 2>including futures trading and index options, and joining us from

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<v Speaker 2>Miami as robin Hood Chairman and CEO, Lad Tenev. You know,

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<v Speaker 2>I understand that you have hundreds of people there and

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<v Speaker 2>another two million people nearly viewing online on your live stream.

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<v Speaker 2>You are looking to expand your product suite for new customers.

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<v Speaker 2>I want to point back to just a day ago, Vlad. Also,

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<v Speaker 2>I spoke to Morgan Stanley's CEO, Ted Pick. He competes

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<v Speaker 2>with you through their e trade business. He said, the

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<v Speaker 2>retail trader is really what's driving this next leg of

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<v Speaker 2>the market. I'm wondering if you can give me a

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<v Speaker 2>sense of just how much.

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<v Speaker 1>Yeah, we've seen definitely retail engagement higher than at levels

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<v Speaker 1>you'd exp given the high interest rates. So interest rates

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<v Speaker 1>have been have been elevated but coming down. But I

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<v Speaker 1>think what we're seeing is a lot of optimism from

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<v Speaker 1>the retail community. I mean, we have eight hundred of

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<v Speaker 1>our most active customers with us in the conference, and

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<v Speaker 1>as I was going around and talking to a large

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<v Speaker 1>portion of them, conversation kept coming back to artificial intelligence,

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<v Speaker 1>electric vehicles, areas that you know, the American economy is

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<v Speaker 1>very much leading, and I think that's been a source

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<v Speaker 1>of all this optimism. Of course, there's been all sorts

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<v Speaker 1>of problems in the world, geopolitical and otherwise, but I

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<v Speaker 1>don't think you can deny that in growth sectors like

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<v Speaker 1>artificial intelligence, financial services, electric vehicles, and renewable energy, America

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<v Speaker 1>continues to lead, and I think that's the source of

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<v Speaker 1>the optimism that we've been seeing.

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<v Speaker 2>It's interesting you're launching these new products around futures and

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<v Speaker 2>index options. I'm wondering when you come down to the

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<v Speaker 2>retail trader, how much more interest is there from them

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<v Speaker 2>for these derivative products versus plane vanilla spot trading equities.

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<v Speaker 1>I think for a certain type of customer that is

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<v Speaker 1>much more advanced and sophisticated, these products fill fill a need. So,

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<v Speaker 1>for example, index options, when we talk to our most

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<v Speaker 1>experienced investors, they like the fact that they can take

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<v Speaker 1>a position on an entire market in a sector, and

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<v Speaker 1>they like the fact that since these products are cash settled,

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<v Speaker 1>they can hould them comfortably up until the market close

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<v Speaker 1>without having to worry about sellouts and other things like that.

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<v Speaker 1>And for futures, if you remember the twenty sixteen election,

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<v Speaker 1>the market really moved quite a bit and futures was

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<v Speaker 1>basically the only product that was trading at that time,

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<v Speaker 1>went from a six percent down to one percent up.

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<v Speaker 1>And you know, for customers that want to hedge their

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<v Speaker 1>risk and trade metals and currencies and broad indices, futures

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<v Speaker 1>are a great value proposition.

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<v Speaker 3>And yeah, of course it's interesting to see this launch

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<v Speaker 3>with nineteen days to go until the US presidential election,

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<v Speaker 3>and that contact us to what happened in twenty sixteen

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<v Speaker 3>is nice as well. I want to talk and broaden

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<v Speaker 3>out and talk about robins Hood's business a little bit

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<v Speaker 3>more because you're known for running ads, running promos to

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<v Speaker 3>sort of poach customers from other brokerages. Do you have

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<v Speaker 3>any metrics that you can share with us about whether

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<v Speaker 3>or not you've been successful in that endeavor.

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<v Speaker 1>Yeah, I mean I have to be careful about things

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<v Speaker 1>that are more recent since we are in the quiet period.

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<v Speaker 1>But in the last earnings call, we did talk about

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<v Speaker 1>how for three quarters in a row. We've been seeing

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<v Speaker 1>net inflows from all of the incumbent brokers, and actually,

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<v Speaker 1>as part of the Hood Summit, we announced that we've

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<v Speaker 1>got multiple, multiple of our offers coming simultaneously as part

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<v Speaker 1>of what we call Hoodweek. So that's one percent transfers

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<v Speaker 1>on brokerage accounts, two percent for customers bring a margin

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<v Speaker 1>balance of above ten thousand, and three percent for Gold

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<v Speaker 1>customers bringing in retirement accounts. And I think one of

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<v Speaker 1>the reasons these have resonated is they're uncapped, so you

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<v Speaker 1>can basically bring in any amount of money and we

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<v Speaker 1>would match you these significant amounts on that. So we've

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<v Speaker 1>even had customers that are pretty close to retirement age,

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<v Speaker 1>and you know, they have large retirement accounts, and they're

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<v Speaker 1>bringing their portfolios over to us because the value proposition

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<v Speaker 1>of getting that three percent instantly is so strong. So

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<v Speaker 1>we've seen even older customers than what you might consider

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<v Speaker 1>sort of like a typical Robinhood customer coming in to

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<v Speaker 1>take advantage of the new tools and the new capabilities

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<v Speaker 1>that we offer.

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<v Speaker 4>I want to talk about maybe an atypical Robinhood customer.

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<v Speaker 4>I'm not sure you talk about active traders, and I know,

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<v Speaker 4>you have you know, two million people logged into your event.

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<v Speaker 4>You have a new platform for legendary trading, so very active,

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<v Speaker 4>I'm guessing, and you've got a desktop platform as well.

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<v Speaker 4>But do you work at all with institutional or say rias.

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<v Speaker 4>Do you license out your technology to other platforms to use.

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<v Speaker 1>We've been getting a lot of requests for that actually,

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<v Speaker 1>because you know the things that we've rolled out for

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<v Speaker 1>retail consumers over the past year, you can imagine that

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<v Speaker 1>they're very interesting for institutions as well. For example, we

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<v Speaker 1>have twenty four hour market, which allows we became the

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<v Speaker 1>first retail broker in the US to offer twenty four

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<v Speaker 1>hour trading of single name stocks. Now that's expanded to

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<v Speaker 1>over one thousand names, including you know, some of the

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<v Speaker 1>most popular ones. We have the lowest margin rates in

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<v Speaker 1>the industry. So these are things that are very useful

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<v Speaker 1>to retail. But you can imagine, you know, if you're

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<v Speaker 1>a hedge fund or other institution or a business you

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<v Speaker 1>want access to the markets that's useful to you as well,

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<v Speaker 1>and if you are a registered investment advisor, as you mentioned.

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<v Speaker 1>Thus far the focus has been purely on retail. We

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<v Speaker 1>want to make sure that we're as focused as possible,

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<v Speaker 1>and we do, frankly, you know, as good of a

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<v Speaker 1>job as we can on a limited set of things.

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<v Speaker 1>But I think over time that's a natural expansion opportunity

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<v Speaker 1>for US institutions care just as much about access to

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<v Speaker 1>markets and having the lowest possible rates and the best economics.

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<v Speaker 2>But I'm also curious about something you mentioned earlier, this

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<v Speaker 2>kind of interest in the US election cycle. Certainly we

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<v Speaker 2>have seen a lot of single name trades headed up

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<v Speaker 2>to that election. We have seen DJT whipsaw quite meaningfully alone,

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<v Speaker 2>along with other Trump trades in recent days. How are

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<v Speaker 2>users on your platform trading the election by and large,

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<v Speaker 2>and how are they reflecting it through the options market,

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<v Speaker 2>including the spot market.

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<v Speaker 1>Yeah, I mean, I think one of the interesting developments,

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<v Speaker 1>and this does this does have to do with futures

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<v Speaker 1>as well, is the introduction of prediction markets and the

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<v Speaker 1>presidential election contracts. That is a recent thing, and I

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<v Speaker 1>think what customers are really showing is that they need

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<v Speaker 1>more accurate information and they're turning to some of these

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<v Speaker 1>alternative sources, not just as a mechanism to trade and

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<v Speaker 1>hedge risk, but just as a way to kind of

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<v Speaker 1>get away from the cloudiness and murkiness of these poles.

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<v Speaker 1>I think polls have lost a lot of their power

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<v Speaker 1>and credibility over the past few years, and some of

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<v Speaker 1>these alternative markets, people are putting real money on the line,

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<v Speaker 1>and I think the signal for that is very strong

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<v Speaker 1>and powerful.

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<v Speaker 3>All Right, glad we got to leave it there. Really

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<v Speaker 3>appreciate you taking time. That is Robinhood, CEO of lad

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<v Speaker 3>ten of joining us from Miami