Robinhood’s securities lending volume increased five-fold in 2020
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Robinhood’s securities lending volume increased five-fold in 2020 25 March 2021US Reporter: Drew Nicol
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Robinhood, the no-fee retail trading app at the centre of the recent GameStop short squeeze furore, has disclosed the massive growth in its securities lending business in 2020 in its latest broker filing with the US Securities and Exchange Commission (SEC).
Robinhood Securities, the broker subsidiary of Robinhood, loaned $1.92 billion worth of shares held in its clients margin accounts in 2020, up from $674 million in 2019.
The broker received $1.78 billion in pledged collateral against these loans.
The pool of assets available to lend in Robinhood margin accounts ballooned in 2020 as a new cohort of retail investors took their first foray into trading partly as a consequence of the COVID-19 pandemic disrupting the US economy.
The trading app gained more than 3 million users in 2020, which led to Robinhood sitting on assets available to lend worth $4.63 trillion held in customer margin accounts as of December 2020.
The filing also reveals that Robinhood borrowed $372,000 worth of securities in 2020.
Robinhood will not have to disclose details of its lending programme during the recent ‘meme stock’ turmoil seen in January until this time next year.
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