Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Now we're going to head to that Hood summit because
Speaker 2: robin Hood's first ever consumer focused summit here is underway
Speaker 2: in Miami. The retail brokerage announced a host of new features,
Speaker 2: including futures trading and index options, and joining us from
Speaker 2: Miami as robin Hood Chairman and CEO, Lad Tenev. You know,
Speaker 2: I understand that you have hundreds of people there and
Speaker 2: another two million people nearly viewing online on your live stream.
Speaker 2: You are looking to expand your product suite for new customers.
Speaker 2: I want to point back to just a day ago, Vlad. Also,
Speaker 2: I spoke to Morgan Stanley's CEO, Ted Pick. He competes
Speaker 2: with you through their e trade business. He said, the
Speaker 2: retail trader is really what's driving this next leg of
Speaker 2: the market. I'm wondering if you can give me a
Speaker 2: sense of just how much.
Speaker 1: Yeah, we've seen definitely retail engagement higher than at levels
Speaker 1: you'd exp given the high interest rates. So interest rates
Speaker 1: have been have been elevated but coming down. But I
Speaker 1: think what we're seeing is a lot of optimism from
Speaker 1: the retail community. I mean, we have eight hundred of
Speaker 1: our most active customers with us in the conference, and
Speaker 1: as I was going around and talking to a large
Speaker 1: portion of them, conversation kept coming back to artificial intelligence,
Speaker 1: electric vehicles, areas that you know, the American economy is
Speaker 1: very much leading, and I think that's been a source
Speaker 1: of all this optimism. Of course, there's been all sorts
Speaker 1: of problems in the world, geopolitical and otherwise, but I
Speaker 1: don't think you can deny that in growth sectors like
Speaker 1: artificial intelligence, financial services, electric vehicles, and renewable energy, America
Speaker 1: continues to lead, and I think that's the source of
Speaker 1: the optimism that we've been seeing.
Speaker 2: It's interesting you're launching these new products around futures and
Speaker 2: index options. I'm wondering when you come down to the
Speaker 2: retail trader, how much more interest is there from them
Speaker 2: for these derivative products versus plane vanilla spot trading equities.
Speaker 1: I think for a certain type of customer that is
Speaker 1: much more advanced and sophisticated, these products fill fill a need. So,
Speaker 1: for example, index options, when we talk to our most
Speaker 1: experienced investors, they like the fact that they can take
Speaker 1: a position on an entire market in a sector, and
Speaker 1: they like the fact that since these products are cash settled,
Speaker 1: they can hould them comfortably up until the market close
Speaker 1: without having to worry about sellouts and other things like that.
Speaker 1: And for futures, if you remember the twenty sixteen election,
Speaker 1: the market really moved quite a bit and futures was
Speaker 1: basically the only product that was trading at that time,
Speaker 1: went from a six percent down to one percent up.
Speaker 1: And you know, for customers that want to hedge their
Speaker 1: risk and trade metals and currencies and broad indices, futures
Speaker 1: are a great value proposition.
Speaker 3: And yeah, of course it's interesting to see this launch
Speaker 3: with nineteen days to go until the US presidential election,
Speaker 3: and that contact us to what happened in twenty sixteen
Speaker 3: is nice as well. I want to talk and broaden
Speaker 3: out and talk about robins Hood's business a little bit
Speaker 3: more because you're known for running ads, running promos to
Speaker 3: sort of poach customers from other brokerages. Do you have
Speaker 3: any metrics that you can share with us about whether
Speaker 3: or not you've been successful in that endeavor.
Speaker 1: Yeah, I mean I have to be careful about things
Speaker 1: that are more recent since we are in the quiet period.
Speaker 1: But in the last earnings call, we did talk about
Speaker 1: how for three quarters in a row. We've been seeing
Speaker 1: net inflows from all of the incumbent brokers, and actually,
Speaker 1: as part of the Hood Summit, we announced that we've
Speaker 1: got multiple, multiple of our offers coming simultaneously as part
Speaker 1: of what we call Hoodweek. So that's one percent transfers
Speaker 1: on brokerage accounts, two percent for customers bring a margin
Speaker 1: balance of above ten thousand, and three percent for Gold
Speaker 1: customers bringing in retirement accounts. And I think one of
Speaker 1: the reasons these have resonated is they're uncapped, so you
Speaker 1: can basically bring in any amount of money and we
Speaker 1: would match you these significant amounts on that. So we've
Speaker 1: even had customers that are pretty close to retirement age,
Speaker 1: and you know, they have large retirement accounts, and they're
Speaker 1: bringing their portfolios over to us because the value proposition
Speaker 1: of getting that three percent instantly is so strong. So
Speaker 1: we've seen even older customers than what you might consider
Speaker 1: sort of like a typical Robinhood customer coming in to
Speaker 1: take advantage of the new tools and the new capabilities
Speaker 1: that we offer.
Speaker 4: I want to talk about maybe an atypical Robinhood customer.
Speaker 4: I'm not sure you talk about active traders, and I know,
Speaker 4: you have you know, two million people logged into your event.
Speaker 4: You have a new platform for legendary trading, so very active,
Speaker 4: I'm guessing, and you've got a desktop platform as well.
Speaker 4: But do you work at all with institutional or say rias.
Speaker 4: Do you license out your technology to other platforms to use.
Speaker 1: We've been getting a lot of requests for that actually,
Speaker 1: because you know the things that we've rolled out for
Speaker 1: retail consumers over the past year, you can imagine that
Speaker 1: they're very interesting for institutions as well. For example, we
Speaker 1: have twenty four hour market, which allows we became the
Speaker 1: first retail broker in the US to offer twenty four
Speaker 1: hour trading of single name stocks. Now that's expanded to
Speaker 1: over one thousand names, including you know, some of the
Speaker 1: most popular ones. We have the lowest margin rates in
Speaker 1: the industry. So these are things that are very useful
Speaker 1: to retail. But you can imagine, you know, if you're
Speaker 1: a hedge fund or other institution or a business you
Speaker 1: want access to the markets that's useful to you as well,
Speaker 1: and if you are a registered investment advisor, as you mentioned.
Speaker 1: Thus far the focus has been purely on retail. We
Speaker 1: want to make sure that we're as focused as possible,
Speaker 1: and we do, frankly, you know, as good of a
Speaker 1: job as we can on a limited set of things.
Speaker 1: But I think over time that's a natural expansion opportunity
Speaker 1: for US institutions care just as much about access to
Speaker 1: markets and having the lowest possible rates and the best economics.
Speaker 2: But I'm also curious about something you mentioned earlier, this
Speaker 2: kind of interest in the US election cycle. Certainly we
Speaker 2: have seen a lot of single name trades headed up
Speaker 2: to that election. We have seen DJT whipsaw quite meaningfully alone,
Speaker 2: along with other Trump trades in recent days. How are
Speaker 2: users on your platform trading the election by and large,
Speaker 2: and how are they reflecting it through the options market,
Speaker 2: including the spot market.
Speaker 1: Yeah, I mean, I think one of the interesting developments,
Speaker 1: and this does this does have to do with futures
Speaker 1: as well, is the introduction of prediction markets and the
Speaker 1: presidential election contracts. That is a recent thing, and I
Speaker 1: think what customers are really showing is that they need
Speaker 1: more accurate information and they're turning to some of these
Speaker 1: alternative sources, not just as a mechanism to trade and
Speaker 1: hedge risk, but just as a way to kind of
Speaker 1: get away from the cloudiness and murkiness of these poles.
Speaker 1: I think polls have lost a lot of their power
Speaker 1: and credibility over the past few years, and some of
Speaker 1: these alternative markets, people are putting real money on the line,
Speaker 1: and I think the signal for that is very strong
Speaker 1: and powerful.
Speaker 3: All Right, glad we got to leave it there. Really
Speaker 3: appreciate you taking time. That is Robinhood, CEO of lad
Speaker 3: ten of joining us from Miami