Robinhood brokerage accounts
To suit your investing goals and needs, you can trade with or without margin in your Robinhood brokerage account. The following are some key differences between them.
When you sign up for a Robinhood account, you’ll automatically start with a Robinhood margin account.
- Trade with unsettled funds from stock sales: You don’t have to wait for funds to settle (2 trading days for stocks).
- Pattern day trading regulations apply: If you make 4 or more day trades within 5 trading days with a margin account, you may be flagged as a pattern day trader. Review Pattern day trading for more information.
- Margin investing (this optional feature is not yet available): Subject to eligibility criteria, this option enables you to borrow money from Robinhood and leverage your holdings to purchase securities. This option gives you access to additional buying power based on the value of certain securities in your brokerage account. Risks are described in Disclosures.
- No trading with unsettled funds from stock sales: Stocks take 2 trading days to settle.
- Unlimited day trades: Non-margin accounts aren’t subject to pattern day trading regulations.
If you want to switch between a margin account and a non-margin account, do the following steps:
- Select Account (person) → in the app, Menu (3 bars) or Settings (gear)
- Select Investing
- In Account type, and then select either Switch to margin account or Switch to non-margin account
Note
You can’t switch accounts more than once each trading day. Also, if you made a day trade before switching to a non-margin account, you have to wait 5 trading days after that trade to switch back.
All investments involve risk and loss of principal is possible. Margin investing involves the risk of greater investment losses. Before using margin, customers must determine whether this type of strategy is right for them given their investment objectives and risk tolerance. For more information, review our Margin Disclosure Statement.
Robinhood doesn’t promote day trading. Day trading can be extremely risky. Day trading is generally not appropriate for someone of limited resources, limited investing experience, and low risk tolerance. For more information, review our Day Trading Risk Disclosure.
Robinhood U.K. Ltd (Robinhood UK) is a company registered in England and Wales (09908051) and is authorised and regulated by the Financial Conduct Authority (FRN: 823590). Robinhood UK onboards UK customers and has the lead customer relationship with UK customers in relation to their use of the Robinhood UK app and website. Robinhood UK introduces UK customers to Robinhood Securities, LLC for order routing, execution, clearing, settlement, arranging custody services and margin lending to eligible UK customers with margin accounts. Robinhood Securities, LLC is regulated in the US by the SEC and FINRA. Robinhood UK and Robinhood Securities, LLC are subsidiaries of Robinhood Markets, Inc.
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FAQs
Your securities and cash are protected by SIPC
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.
Why won't Robinhood allow me to trade options? ›
Options trading might not be available to you on Robinhood because you're not approved yet. Robinhood limits options trading to more experienced traders.
Why does Robinhood say brokerage account deficit? ›
You have an account deficit because you've used more buying power than you had available. Several things can cause you to have an account deficit, including ACH reversals after using Instant Deposits, fees, and cases when you're assigned early on an options spread or in certain option exercise scenarios.
Is Robinhood a good brokerage for beginners? ›
Robinhood is a good fit for beginner investors, and the company made our list of the best brokers for beginners. The app offers a streamlined, approachable and easy-to-navigate trading platform, plus extremely low costs, which beginner investors tend to prioritize.
Should I keep all my money in a brokerage account? ›
As a general rule, unless you can leave the money invested for around two to five years, it should be in savings instead of a brokerage account. Otherwise, the risk is too high that you'll end up buying and selling at a bad time before you make enough profits to break even.
What is the disadvantage of using Robinhood? ›
Robinhood's range of offerings is extremely limited in that it only offers stocks, ETFs, options, and cryptocurrency trading. Robinhood doesn't support mutual funds or fixed-income products, and you can't trade commodities, forex, or futures.
Why won't Robinhood let me buy stocks? ›
Your Robinhood investing account might be restricted for a number of reasons, including the following: Company control person. Bank transfer reversals. Incorrect or outdated account information.
Why won't Robinhood let you day trade? ›
Understanding the rule
If your account is flagged for PDT, you're required to have a portfolio value of at least $25,000 to continue day trading. Your portfolio value is the sum of your cash, stocks, and options, and doesn't include crypto positions.
Why can't I sell my options on Robinhood? ›
Note that Robinhood doesn't allow selling uncovered options, because there's no limit to the amount of money you could lose with some strategies.
Why can't i withdraw money from Robinhood brokerage? ›
Following a sale in your investing or retirement account for equities or options, the transaction usually needs to settle before you can withdraw the proceeds to your bank account. The settlement period for equities is the trade date plus 2 trading days (T+2), sometimes referred to as regular-way settlement.
There are dozens of brokerage firms in the US where you can open a brokerage account, including Robinhood (of course), Charles Schwab, E-Trade, Interactive Brokers, and TD Ameritrade. They all vary in terms of services offered and commission rates charged.
Is Robinhood still good in 2024? ›
Robinhood has been a leading stock trading platform for years, but its newest updates to the platform have made an already-good app even better. One of the headlining features of Robinhood is its commission-free stock trading, in addition to commission-free options trading and crypto trading in selected states.
Is Fidelity better than Robinhood? ›
Robinhood is good for simple trades, while Fidelity's mobile offering is more comprehensive and a better platform when it comes to the complete mobile trade experience.
Is my money safe in Robinhood brokerage account? ›
Your securities and cash are protected by SIPC
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.
Is it safe to leave money in brokerage account? ›
Holding cash here is appropriate if you plan to spend the money within a few days or would like to quickly place a trade. Assets in your brokerage account are protected up to $500,000 per investor, including a maximum of $250,000 in cash by SIPC in the event a SIPC-member brokerage fails.
Is your money safer in a brokerage account? ›
Cash and securities in a brokerage account are insured by the Securities Investor Protection Corporation (SIPC). The insurance provided by SIPC covers only the custodial function of a brokerage: It replaces or refunds a customer's cash and assets if a brokerage firm goes bankrupt.
Is my Robinhood brokerage account insured? ›
Account Protection with SIPC at No Additional Cost to You.
Robinhood's broker-dealers, Robinhood Financial LLC and Robinhood Securities, LLC, are members of the Securities Investor Protection Corporation (SIPC), which protects securities customers of its members up to $500,000 (including $250,000 for claims for cash).
Is it safe to put all money in one brokerage? ›
Spreading your assets across different brokerage accounts can help protect you against potential fraud or unauthorized access, Roller says. If one broker has a breach, then you can still trade with another investment firm. The safety of your funds is also a concern.
