Retail brokerages Interactive Brokers Group Inc and Robinhood experienced glitches early on Monday that prevented some or all of their users from trading as the U.S. markets were opening.
The problems were the latest in a string of technical issues among retail brokerages this year as trading volumes have surged on the back of a move by these brokerages to cut commissions to zero on most platforms, and as markets surged this year after a sharp downturn at the beginning of the COVID-19 pandemic.
Interactive Brokers said it experienced “a significant failure” in a data storage system that left its users unable to trade, but that most of its services had been restored and the others were expected to be up again “promptly.”
“We recognize the dislocation this has caused to our clients, and express our apologies,” the New York-based company said in a statement.
The Menlo Park, California-based Robinhood said it experienced a “disruption in service,” but that all its systems were now operational.
The glitches left users of both brokerages scrambling.
“It is a nightmare holding a position you cannot close at will. It’s like sitting in a car without brakes,” a Berlin-based Interactive Brokers user told Reuters.
“Please fix the app we can’t sell or buy, for options trading it’s killing us every time service is down,” a Robinhood user said on Twitter.
Retail brokers have been under scrutiny over outages and spent months shoring up their platforms ahead of last month’s U.S. elections in preparation for expected record volumes, but several high-profile glitches have happened since.
“Obviously, this is a black eye on any firm that has an outage because customers depend upon their access to the market, and the more time-sensitive their trading, the bigger the risk from an outage,” said James Angel, a finance professor at Georgetown University.
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