Why can’t I use all of my buying power?
Your available buying power for a security can differ from your full buying power, depending on the security you are trading.
The initial requirement for a marginable security is the minimum amount you must have to cover the trade before investing on margin, which is generally 50%.
Keep in mind, certain securities may require a minimum amount that is more than 50% to cover the trade. Your available buying power for these securities is reflected on the security’s detail page and during the process of making the trade.
If the initial margin requirement is 50% for $10,000 of stock that you want to buy, then you’d need to either deposit or confirm you have $5,000 (50% of $10,000) in your account before you can make the trade.
All investments involve risk including loss of principal. No investments are FDIC insured. The example is hypothetical and doesn’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, 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 its 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.
For more information, review 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.