How do I know when I’m investing on margin?
Before you can invest on margin, you have to apply and meet certain eligibility requirements.
You’ll only start investing on margin after the cash in your brokerage account has been fully invested. This means that if you have cash in your account, you won’t invest on margin until it’s fully spent.
Let’s say you have $3,000 in your brokerage account—$2,800 in stocks and $200 cash. If you buy an additional $500 of YOWL stock, you’ll use your $200 in remaining cash first and the remaining $300 would be invested on margin using the securities in your account as collateral.
After you’ve used margin funds for investing, you can check your total amount of margin in Investing → Buying power
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 that 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, experience, risk tolerance, and financial situation.
Regardless of the underlying value of the securities you purchased, you must repay your margin debt. Robinhood can change their margin maintenance requirements at any time without prior notice. If the equity in your account falls below the minimum maintenance requirements (varies according to the security), you’ll have to deposit additional cash or sell securities to reduce your margin loan. If you fail to meet your minimums, Robinhood may be forced to sell some or all of your securities, with or without your prior approval.
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 Robinhood Financial’s Customer Relationship Summary, Margin Disclosure Statement, and Margin Account Agreement. These disclosures contain important information on Robinhood’s U.K. 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 is subject to Robinhood's eligibility criteria and terms and conditions apply.