You’ll be prevented from making day trades in the instances listed below.
Pattern Day Trader (less than $25,000)
If you execute 4 day trades within 5 days, your account will get flagged for pattern day trading for 90 days. As a pattern day trader, if your account equity (stocks, options, and cash) is less than $25,000, you won’t be able to day trade until your account equity closes normal market hours above $25,000, or until the 90-day period passes.
If you end the trading day with an account equity above $25,000, your day trade restriction will be lifted for the following trading day. If you close any trading day under $25,000 while in an active PDT flag, you will be day trade restricted until you bring your account equity back above $25,000.
Pattern Day Trader Flagged (over $25,000) and Crypto Orders
Also, if your Robinhood Financial account has been flagged for Pattern Day Trading, and your account equity is above $25,000, your order on Robinhood Crypto may be denied if that order would put your Robinhood Financial account at risk of falling below the $25,000 requirement.
Please keep in mind that if your Robinhood Financial account has been restricted to “Position-Closing Only,” you will only be able to make position closing cryptocurrency trades as well.
Active Day Trade Call
You can’t day trade while you’re in a day trade call. You can resolve your day trade call by depositing funds. The deposited cash must remain in your Robinhood account for 2 trading days to settle your call. Once the call is met, the day trade restriction will be lifted starting the following trading day.
Uncovered Day Trade Call
If you don’t cover your day trade call within the 5-day window, you’ll be restricted from day trading for 90 days. You can resolve your day trade call by depositing the required amount, which you can find in the day trade call email, in the in-app card, and in your account menu.
This deposit needs to be in your account for 5 trading days. After the fifth trading day, you can withdraw the funds. If you deposit the required amount before market close, the restriction will be removed the following trading day.
Pattern Day Trading Restrictions
If you day trade with a pattern day trading flag and ended the previous trading day below the $25,000 equity requirement, you will be issued a day trade violation and your account will be restricted from purchasing for 90 days.
This restriction can be removed if you close the trading day above $25,000. We will only remove this type of restriction 3 times within a rolling 12 month period. If you incur a fourth pattern day trading violation within a 12 month period, the “position-closing only” restriction will remain on your account for 90 days. We recognize this may be an inconvenience, but please know that it is our firm policy and there are no exceptions.
You won’t be able to buy stocks, options, or cryptocurrencies when you’re in a margin call. You’ll need to deposit funds or sell stock to cover your margin call. If you don’t cover your margin call, a broker from Robinhood may sell a portion of your portfolio to cover your call. Once your call is resolved, you’ll be able to buy stocks again on the next trading day.
Regulation T Calls
If you find yourself in a Reg T call, it’s because you haven’t met the initial requirement for the stocks you’ve bought. The initial requirement is simply the value amount of cash or marginable stocks you need to have in your account in order to buy a stock. The initial requirement for all stocks is 50%, which means you need to have at least 50% of your purchase backed by cash or marginable stocks. If you don’t have the assets to back your purchase, you can either deposit cash to cover your call, or you can sell off stocks in your account.
If you choose to sell stocks in your account, you have two options:
If your call amount is $100, you’ll need to sell $200 of marginable stocks. $200 * (0.50) = $100.
If your call amount is $100, you’ll need to sell $100 of non-marginable stocks. $100 * (1.0) = $100.
If you don’t cover your call, we’ll have to prevent you from buying additional stocks and sell off enough stock to cover your call.
Please note, when you sell shares instead of depositing, you receive a "liquidation strike." This just means that you sold some of your positions to cover an active call. But, if you get 3 liquidation strikes within a 365-day period, you won’t be able to buy any stocks, options, or cryptocurrencies for 90 days.
Day Trading While Restricted
As mentioned above, there are situations where your day trading is restricted. If you execute a day trade while your day trading is restricted, you won’t be able to buy stock for 90 days.
If you declare yourself as a control person for a company, you are typically blocked from trading that stock. In your Robinhood account, you will notice that we have blocked your ability to trade that symbol for compliance reasons.
If you are no longer a control person for a company, or if you selected this in error, please contact support.
Restrictions may be placed on your account for other reasons. Some of these reasons include:
If you have a restriction placed on your Robinhood Financial account that prevents you from buying stocks, you will also be prevented from buying cryptocurrencies with your Robinhood Crypto account until the restriction is lifted.
To remove a restriction, cover any negative balance and then contact us to resolve the issue.
All investments involve risks, including the loss of principal. Investors should consider their investment objectives and risks carefully before investing.
Margin trading 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. For more information please see Robinhood Financial’s Margin Disclosure Statement, Margin Agreement and FINRA Investor Information. These disclosures contain information on Robinhood Financial’s lending policies, interest charges, and the risks associated with margin accounts.
Securities trading is offered through Robinhood Financial LLC, member SIPC and FINRA. Cryptocurrency trading is offered through Robinhood Crypto, LLC. Robinhood Financial LLC and Robinhood Crypto, LLC are subsidiaries of Robinhood Markets, Inc. (‘Robinhood’).