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Margin Calls

What is a margin call?

Margin calls can happen for a variety of reasons—a decline in the value of your holdings, ACH reversals, or options assignments—causing the portfolio value (minus any cryptocurrency positions) to fall below your margin maintenance requirement. If you get a margin call, you need to bring your portfolio value (minus any cryptocurrency positions) back up to your minimum margin maintenance requirement, or you risk Robinhood having to liquidate your position(s) to bring your portfolio value (minus any cryptocurrency positions) back above your margin maintenance requirement.

How do I avoid a margin call?

Margin calls are no fun, so we’re happy to give you some tips on how to avoid them.

  • To stay updated on the status of your margin balances, regularly check the buying power screen or the margin investing section of the account settings page.
  • Look out for updates from us when your portfolio value (minus any cryptocurrency positions) is getting close to your account’s margin maintenance requirement. You’ll typically receive an inbox message when you’re close to receiving a margin maintenance call, and an email once you’ve received one.

What do I do if I get a margin call?

There are two ways for you to resolve a margin call:

  1. You can deposit additional funds to increase your portfolio value (minus any cryptocurrency positions) above the margin maintenance. This will allow you to keep your positions.
  2. You can close some of your positions by selling shares or exercising options. The proceeds from the sales or funds or shares from exercise will help cover your margin call. This may allow you to avoid depositing additional funds.

Disclosures

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.

Reference No. 1394004
Still have questions? Contact Robinhood Support