Popular trading app Robinhood has promised to compensate users after its systems went offline just as stock markets rebounded from their worst week since the 2008 financial crisis.
Affected traders may however want to hold off celebrating, as TechCrunch reports that Robinhood is to offer a meagre $15 discount on subscriptions in a bid to make things right.
Robinhood calls this a “first step,” and said it will eventually contact users on a case-by-case basis to explore additional compensation.
“When it comes to your money, issues like this are not acceptable. We realize we let you down, and our team is committed to improving your experience,” Robinhood wrote in an email to users on Tuesday.
Robinhood outages couldn’t have come at a worse time
The app is now back online, but technical errors forced many users to miss potential financial gains all day on Monday, when the Dow rose by 5%, or more than 1,293 points.
This was reportedly the most points gained in a single day ever and the largest percentage bump since March 2009. In total, the market gained $1.1 trillion.
Tuesday morning saw additional downtime between 6AM and 9:30AM PT, just as a Federal Reserve rate cut began to push markets to reverse those gains.
Options traders were likely the most frustrated. The errors meant Robinhood executed options (contracts that give the right but not the obligation to buy or sell a stock at a certain price) as soon as they were at least $0.01 “in the money,” as traders were not able to log into the service to make such decisions themselves.
Options are popular on the r/wallstreetbets subreddit, which was flooded with complaints from disenfranchised Robinhood users.
As for the cause of the downtime, rumors had circulated that an apparent failure to code for the advent of leap years in the Robinhood app.
An official Robinhood Twitter account refuted those claims, instead blaming unprecedented load spurred on by “highly volatile and historic market conditions,” “record volume,” and “record account sign-ups.”
“We now understand the cause of the outage was stress on our infrastructure — which struggled with unprecedented load,” said Robinhood in a blog post. “That in turn led to a ‘thundering herd’ effect — triggering a failure of our DNS system.”
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