We keep your Robinhood account safe in a number of different ways.
Robinhood Financial LLC and Robinhood Securities, LLC are both members of SIPC, which protects securities for customers of its members up to $500,000 (including $250,000 for claims for cash) for each investing account, including IRAs. Explanatory brochure available upon request or at www.sipc.org.
We’ve purchased an additional insurance policy for Robinhood Markets, Inc., Robinhood Financial LLC, and Robinhood Securities, LLC to supplement SIPC protection. The additional insurance becomes available to customers in the event that SIPC limits are exhausted. This additional insurance policy provides protection for securities and cash up to an aggregate of $1 billion, and is limited to a combined return per customer of $50 million in securities, including $1.9 million in uninvested cash. Similar to SIPC protection, this additional insurance doesn’t protect against a loss in the market value of securities.
Keep in mind
SIPC coverage doesn’t protect against a loss in the market value of securities. Crypto positions through Robinhood Crypto aren’t protected by SIPC and Robinhood Crypto isn’t a member of FINRA or SIPC.
Brokerage customers who opt in to the Brokerage cash sweep program have their eligible uninvested cash automatically (unrestricted cash intended for investing that hasn't yet been invested or spent) deposited at these banks where it becomes eligible for FDIC insurance up to a total maximum of $2.25 million. That’s up to $250,000 per program bank, inclusive of deposits already held at the bank in the same ownership capacity, subject to FDIC insurance coverage limits and any capacity limitations at the banks. While the FDIC insurance coverage limit at each bank is $250,000, $2,000 is reserved for accrued interest. If you opt out of one or more of the program banks, your FDIC insurance coverage may be reduced.
Robinhood’s security team uses a number of industry-standard measures to protect your account and ensure your experience with us is safe and secure. We understand that you place a lot of trust in our services, and we're constantly working to ensure Robinhood is one of the safest places for you to build your financial future.
Password safety
When we store your account passwords, we hash them using the industry-standard BCrypt hashing algorithm and never store them in plaintext—which means they're stored in a scrambled format that makes them difficult and time-intensive for attackers to crack.
Encryption
Sensitive information, such as your Social Security number, are encrypted before they’re stored. In addition, our app and website securely communicate with our servers using the Transport Layer Security (TLS) protocol with up-to-date configurations and ciphers. TLS helps ensure that anything you send to our servers remains private—including your personal and account information such as your password, bank account, and more.
Once we verify your banking credentials, we’ll never access them again. We use trusted third-party integrations to access information about your bank account, such as your account number and available balance.
Two-factor authentication
Two-factor authentication (2FA) helps protect your Robinhood account by requiring 2 sources of verification to sign in to your Robinhood account: something you know (your password) and something you have (a one-time verification code or device approval request). Every time you log in or make changes to your Robinhood account, you’ll be required to verify your identity before completing the action. This step helps protect your Robinhood account, even if someone knows or guesses your password.
All Robinhood accounts are protected with 2FA for new devices. This is a layer of security applied to all Robinhood accounts—this helps us ensure it's really you signing in to your Robinhood account.
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FAQs
Two-factor authentication (2FA) helps protect your Robinhood account by requiring 2 sources of verification to sign in to your Robinhood account: something you know (your password) and something you have (a one-time verification code or device approval request).
Why won't Robinhood allow me to trade options? ›
If your financial status isn't strong enough, you may be assessed as too high of a risk for making losses. That means the app will wait until you have made several trades before approving you for option trading.
How to get approved for options in Robinhood? ›
You likely can't enable options trading on Robinhood because you don't have enough experience. Robinhood reviews every request for options trading, just like other brokers. Robinhood's review process ensures that you have a sufficient balance and trading experience required for options trading.
Is it safe to give SSN to Robinhood? ›
Robinhood has a good track record of protecting users' Social Security numbers, though, so providing yours is as safe as giving it to most reputable financial apps. Unfortunately, U.S. FinCEN requires you to provide your Social Security number to your stock brokerage for identity-verification purposes.
Can a 14 year old use Robinhood? ›
To apply for a Robinhood account, you'll need to have a device that meets our Technology requirements, and meet all of the following individual requirements: Be 18 years or older. Have a valid Social Security Number (not a Taxpayer Identification Number)
Why can't you trade options on some stocks? ›
The Bottom Line. Stocks must meet a stringent list of requirements to be optionable, and not every stock will qualify. Stocks must meet exchange regulations in order to be listed with options; the exchange has the final word, not the stock-issuing company.
Are there any problems with Robinhood today? ›
No incidents reported today.
How do you get approved for options? ›
Once you've selected an option level, you'll be required to submit a variety of qualifying information which includes creating a trading profile, sharing your employment status, source of income and more. Finally, you'll be asked to verify all the information you've provided.
How much money do you need to buy options on Robinhood? ›
Cost of the trade
To buy a call option, you must pay the option's premium. Let's say, you purchase a call for $2. Since a standard option controls 100 shares of the underlying, you'd need $200 to purchase one contract. To buy 10 contracts, you'd need $2,000, and so on.
Is options trading worth it? ›
Trading options offers a number of benefits for an active trader: Options can offer high returns and do so over a short period, allowing you to multiply your money quickly if your wager is right. With options, it can cost less to get the same exposure to a stock's price movement than it does to buy the stock directly.
Robinhood is considered safe for investors. It's a member for the Securities Investor Protection Corp. (SIPC), is regulated by the SEC, and has additional financial protection per customer up to certain amounts for cash and securities.
Can I open Robinhood without SSN? ›
To verify your identity, Robinhood will need your Social Security number.
Why not use Robinhood? ›
What are the disadvantages of using Robinhood? The main downside of Robinhood is that the investment selection is limited for hands-off, passive investors: The broker offers no mutual funds or index funds, which financial advisors typically suggest using as the basis of a diversified portfolio.
Do I pay taxes on Robinhood? ›
You will, however, need to pay tax on any profits you make when you sell stock. Stocks held less than one year are subject to the short term capital gains tax rate, which is the same tax rate you pay on your ordinary income.
Do I pay taxes on Robinhood if I don't withdraw? ›
When you buy or sell an investment with Robinhood, the standard tax laws apply. What types of taxes can you expect to pay? The length you hold the investment determines the taxes owed. A common misconception is that you can trade as much as you like, and if you don't withdraw money, you owe no taxes.
Does Robinhood report to the IRS? ›
Currently, gross proceeds shown in the Robinhood Crypto 1099-B and rewards shown in the Robinhood Crypto 1099-MISC (if greater than $600) are reported to the IRS.
Why can't i trade level 3 options on Robinhood? ›
Level 3 options trading is available in margin accounts, but not in cash accounts or Robinhood Retirement.
Can I trade options on Robinhood IRA account? ›
IRA limited margin account and cash account
IRA limited margin accounts let you trade with unsettled funds from stock and option sales. With cash accounts, you'll need to wait 2 days to trade with funds from stock sales and 1 day to trade with funds from option sales.
How to buy call options on Robinhood? ›
How to Buy Calls on Robinhood
- Find Stocks You Think Will Appreciate Quickly. ...
- Make Sure Options are Available and Liquid. ...
- Choose a Strike Price and Expiration Date. ...
- Determine How Many Call Options to Buy. ...
- Execute Your Trade.
