What’s margin maintenance?
Margin maintenance is the minimum portfolio value (minus any cryptocurrency positions) that you need to maintain before you’re at risk of being issued a margin call.
You can see your margin maintenance in the Margin Investing section of your Robinhood Gold settings. Your margin maintenance will change based on a model that considers certain factors, such as volatility and market liquidity. Stocks that are known to be more volatile, for example, typically have higher maintenance requirements to ensure you have enough portfolio value to cover the position if it quickly decreases in value.
If your portfolio value (minus any cryptocurrency positions) dips below the margin maintenance requirement, you may be issued a margin call.
Please note that Robinhood can adjust margin maintenance requirements at any time and sell out whichever positions deemed fit to satisfy your margin call, without notifying you first or gaining your authorization.
Cryptocurrency positions cannot be traded on margin. They’re not accounted for in your portfolio value because cryptocurrencies are not securities, and they’re custodied with our affiliate, Robinhood Crypto, LLC.
All investments involve risk including loss of principal. No investments are FDIC insured. All examples are hypothetical and do not reflect actual or anticipated results. Content is provided for informational purposes only; it does not constitute investment advice and is not a recommendation for any security, account type or feature, or trading strategy. Past performance does not 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 Financial can change their maintenance margin 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 acceptable collateral. If you fail to meet your minimums, Robinhood Financial may be forced to sell some or all of your securities, with or without your prior approval.
The margin interest rate charged by Robinhood Financial is 2.5% as of December 21, 2020. The rate might change at any time and at Robinhood Financial’s discretion.
For more information, please see FINRA’s Investor Alert and Robinhood Financial’s Customer Relationship Summary, Margin Disclosure Statement, and Margin Agreement. These disclosures contain important information on Robinhood Financial’s products and services, conflicts of interests, lending policies, interest charges, and the risks associated with margin investing enabled accounts.
Cryptocurrency trading and custodial services are offered through an account with Robinhood Crypto. Robinhood Crypto is not a member of SIPC or FINRA. Robinhood Crypto and Robinhood Financial are separate but affiliated entities. Cryptocurrencies are not securities and your cryptocurrency investments are not FDIC insured or SIPC protected. For more information see the Robinhood Crypto Risk Disclosure.
Robinhood Financial LLC (member SIPC), is a registered broker dealer. Robinhood Securities, LLC (member SIPC), provides brokerage clearing services. Robinhood Crypto, LLC provides crypto currency trading. All are subsidiaries of Robinhood Markets, Inc. (‘Robinhood’), trading as HOOD on Nasdaq.