Margin investing (also referred to as margin lending) involves interest charges and carries increased risk, it can magnify both your gains and losses, and you could lose more than you invested.

Margin investing allows you to borrow money from Robinhood to buy securities, with your portfolio as collateral. This gives you access to additional buying power based on the value of the securities in your brokerage account and allows you to leverage your existing holdings to purchase securities. When we refer to additional buying power, we mean the amount of money that you’re allowed to borrow from us to invest. If you want to diversify your portfolio or see an opportunity in the market and want to invest more, you may be able to invest right away.

Margin investing is an optional product. You have to apply, meet eligibility requirements, and pass an appropriateness test to get access. There is no credit check performed as part of the margin investing application process.

You must determine whether this type of trading strategy is right for you given your specific investment objectives, investment experience, understanding of margin investing, risk tolerance, and financial situation.

Margin investing involves the risk of greater investment losses and isn’t appropriate for everyone. You should fully understand the conditions and risks involved with using a margin loan to purchase securities:

• You could lose more than you initially invested
• Leveraged investments create a greater potential risk of loss
• Additional costs from margin interest charges (review our UK Fee Schedule)
• You'll be responsible for any deficit if falling prices reduce the value of your securities below the margin maintenance requirement, and you may have to deposit additional funds to your brokerage account account or close positions to reduce your margin loan on short notice to cover the margin maintenance requirement in your account.
• Potential margin calls or liquidation of securities
• We can close some or all of your positions or sell other assets without consulting you to pay off your margin debt.
• You’re not entitled to choose which positions we close or securities we sell from your account to cover your margin debt.
• We can change our house margin maintenance requirements for each security (margin ratio) at any time, and aren't required to provide you advance written notice. This is because we need to be able to adjust the margin ratios in line with rapidly changing market conditions for each security to minimise the risk of insufficient collateral in your account that covers your margin loan.
• You’re not entitled to an extension of time on a margin call.
• Under the margin agreement, purchased shares may serve as collateral for your margin loans and may be lent by RHS to others. You may give up some or all of your voting rights with respect to purchased shares, but you’ll still get a payment for any dividends related to them. Shares and cash owed to you (net of any margin balance owed by you) are protected under SIPC up to $500,000 (including $250,000 for claims for cash) in the unlikely event that Robinhood fails. For details, review our SIPC, FIDC and Account Protection Disclosure.

For more information on the terms and risks associated with margin investing, review our Margin Disclosure Statement.

Robinhood U.K. Ltd. is acting as credit broker and not a lender. The lender is Robinhood Securities, LLC. which is also part of the same group. Robinhood U.K. Ltd. can only introduce you to margin lending with Robinhood Securities, LLC. For details, review the FAQ.

Margin maintenance (sometimes referred to as maintenance margin) is the minimum portfolio value that you need in your account to prevent a margin call. For more details, review What’s margin maintenance?

A margin maintenance call (also referred to as margin call) is a request to increase the amount of equity in your account. You can do this by depositing cash or by liquidating existing positions to generate cash to reduce the margin loan. A margin call is issued when your portfolio value falls below your margin maintenance requirement. To learn more, review What does it mean if I get a margin call?

Profit example

Let’s say you deposit $5,000 in cash and borrow $5,000 on margin to buy 100 shares of a stock for $100 per share—for a total of $10,000.

Since $5,000 of your initial purchase was bought on margin, your portfolio value is $5,000 ($10,000 - amount borrowed = $5,000).

If the stock price increases to $125 per share, the stock is now worth $12,500. Since $5,000 of your initial purchase was bought on margin, you now have $7,500 in portfolio value and you owe $5,000 in margin used.

In this scenario, there’s an unrealised profit of $2,500 as opposed to $1,250 if you didn’t invest on margin and only bought as many shares of stock that you could with your available cash (50 shares for a total of $5,000).

Loss example

Let’s say you deposit $5,000 in cash and borrow $5,000 on margin to buy 100 shares of a stock for $100 per share—for a total of $10,000.

Since $5,000 of your initial purchase was bought on margin, your portfolio value is $5,000 ($10,000 - amount borrowed = $5,000).

If the stock price drops to $75 per share, the stock is now worth $7,500. Since $5,000 of your initial purchase was bought on margin, you now have $2,500 in your portfolio value and you owe $5,000 in margin used.

In this scenario, there’s an unrealised loss of $2,500, as opposed to $1,250 if you didn’t invest on margin and only bought as many shares of stock that you could with your available cash (50 shares for a total of $5,000).

Based on the 2023 average GBP/USD exchange rate of 1.24 (£1 is $1.24) an unrealised loss of $2,500 is equivalent to £2,016.

All investments involve risk including loss of principal. All examples are hypothetical and don’t reflect actual or anticipated results. Content is provided for informational purposes only, doesn’t constitute investment advice, and isn’t a recommendation for any security, account type or feature, or trading strategy. Past performance doesn’t guarantee future results.

Margin investing involves interest charges and risks, including the potential to lose more than deposited or the need to deposit additional collateral in a falling market. Before using margin, customers must determine whether this type of trading strategy is right for them given their specific investment objectives, investment experience, your understanding of margin investing, risk tolerance, and financial situation.

Robinhood charges a margin interest rate that varies depending on your settled margin balance and the upper bound of the Target Federal Funds Rate, which is set by the Federal Reserve and is subject to change without notice. The formulas used to calculate the margin interest rate are subject to change at Robinhood’s discretion.

For more information, review FINRA’s Investor Alert and our Customer Relationship Summary, Margin Disclosure Statement, and Margin Account Agreement. These disclosures contain important information on Robinhood UK products and services, conflicts of interests, lending policies, interest charges, and the risks associated with margin investing enabled accounts.

In relation to margin, Robinhood UK is acting as credit broker and not a lender. Margin is provided by Robinhood Securities, LLC. Robinhood UK and Robinhood Securities, LLC are part of the same group. Robinhood UK can only introduce customers for margin to Robinhood Securities, LLC. Margin investing is optional and subject to Robinhood's eligibility criteria and terms and conditions apply.