Broker Trading 212 has plans to launch options trading in 2024.
The Bulgaria-headquartered company was one of the first firms to offer stock trading in the UK, without dealing fees. It has since grown to £4bn in AUM in the UK and recently opened an entity in Australia.
As we noted in a recent article, demand for options trading has increased over the last couple of years. This appears to have been fuelled by the launch of easy to access apps, most notably Robinhood, in the US.
A person familiar with the launch at Trading 212 noted that, although the goal is to launch options trading in 2024, there is no fixed schedule as to when it will take place.
Brokers in the UK and European Union are in a tougher position than the likes of Robinhood as US firms can monetise client trades with payment for order flow (PFOF).
Spreads are wider on options trades compared to equities, meaning that rebates from market makers are larger. As a consequence, Robinhood derives the largest portion of its overall revenues from the asset class.
However, PFOF is prohibited by regulators in the UK and EU, meaning the model that has proven to be lucrative in the US can’t be structured in the same way.
