Robinhood had another outage Monday morning that once again angered investors who said they were prevented from trading and capitalizing on the extreme market volatility just before the S&P 500 dropped more than 7% and triggered circuit breakers that temporarily stopped trading.
There were widespread complaints on Twitter from users of the Silicon Valley firm’s app who said they could not make any trades for the second straight Monday and were not content with Robinhood’s response to the issue.
Summing up the reaction from investors was a user named Primal Medicine, who tweeted: “Would you mind coming out with a thorough statement regarding: -Why this has happened (again) –What you are doing to prevent this from happening again –Anything to boost user confidence and make me reconsider moving” to another platform?
Also slamming Robinhood was Renaissance Man, who tweeted: “I just can’t believe this. Two Mondays back to back during the most important moments. There could not be any worse of a time for the system to go down. Literally it could not be any worse than this. Please just stop. File bankruptcy and burn in H.E.L.L.”
And Bhargav Shivarthy, vice president of market development at financial services firm Gainfully, tweeted: “@RobinhoodApp just sent me a notification saying I canceled a couple of orders. Here is the thing. I didn’t!”
Robinhood, which started no-commission trading years before Schwab and others followed, declined to specify what caused the outages.
Just after Monday morning’s opening bell, Robinhood tweeted: “Trading is currently down on Robinhood and we’re investigating the issue. We’re focused on getting back up and running as soon as possible and we’ll update the status page with the latest status.robinhood.com.” At about 10:30 a.m. Monday morning, Robinhood tweeted: “Trading has been partially restored on Robinhood and our team is working to get our platform fully back up and running.”
The company did not provide a reason for the outage in its tweets. It did not elaborate much on its website, either, saying there: “The issue has been identified and a fix is being implemented. We are experiencing issues with equities, options and crypto trading.”
Robinhood updated the status of the issue Monday afternoon, saying at the website: “Trading on Robinhood has been functional for new orders with the exception of fractional equities since at least 10:25 AM ET.” The platform was fully operational by 3:30 PM ET, a company spokesperson said. The company believed the interruption was not related to the outage experienced March 2 and was working internally and with its partners to understand what led to the issue, the spokesperson said, adding: “We know this interruption was frustrating for our customers — especially after last week and on a day that trading was halted market-wide. Our platform is now fully operational and we’re working hard to improve our service during these historic and volatile market conditions.”
One week before Robinhood’s March 2 outage, investors of Charles Schwab, Fidelity and TD Ameritrade — firms that, unlike Robinhood, also cater largely to RIAs — were not able to access their retirement accounts at those firms’ websites due to outages. And TD Ameritrade also faced a temporary website outage right at the start of 2020.
However, there were no reports Monday of those other companies’ sites — or with those of Betterment and Vanguard — experiencing any major issues.
“Each firm has its own architecture and infrastructure, and the process can break down in a number of places,” according to Joel Bruckenstein, president of Technology Tools for Today. “It could be that their site is not capable of handling the web traffic, or it could be something on the back end (not enough processing power, etc) to handle the volume,” he told ThinkAdvisor on Monday, adding: “It could also have something to do with the communication between them and the exchanges. I don’t think there is one answer here except historic volume that impacts each firm at whatever their weakest link is.”
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