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I'm not using margin. Why do I have an account deficit?

Before you begin

If you are using margin, check out I'm using margin. Why do I have an account deficit?

You have an account deficit because you’ve used more buying power than you had available. Several things can cause you to have an account deficit, including ACH reversals after using Instant Deposits, fees, and early assignment on options spreads.

ACH Reversals After Using Instant Deposits

If you have a Robinhood Instant account, your transfers will give you early access to some funds in the form of Instant Deposits. (If you have a Robinhood Cash account, you’ll only receive Instant Deposits for up to $1000 of the funds from your first deposit.) If you spend some or all of your Instant Deposits and your scheduled ACH transfer is canceled (your transfer is reversed), the amount of Instant Deposits you’ve used will be deducted from your buying power, potentially causing you to have an account deficit. To learn more about how you can avoid reversals, check out How to Prevent Bank Transfer Reversals.

Fees

If you're charged a fee and you don’t have enough brokerage cash in your account to cover it, you may have an account deficit. Some of the most common fees that cause customers to have an account deficit are Robinhood Gold fees and fees associated with American Depositary Receipts (ADRs). You can find all of your past Robinhood Gold fees and interest payments in the History section of your app. Additionally, you can find information about your next Gold billing cycle in the Account Overview section of the app. Check out our fee schedule to learn more.

Early Assignment on an Options Spread

Note

For more information about assignments, check out Expiration, Exercise, and Assignment.

If you’re trading an options spread, your long leg should cover your short leg. However, you may have an account deficit if the short leg of your options spread is assigned prior to the expiration date. When you’re assigned early on a short leg in general, before you exercise the long leg of your spread, your buying power will decrease and you may have an account deficit. This is because the positions you hold are used to calculate your buying power, and at that time, the shares (for call spreads) or buying power (for put spreads) are needed to cover the deficit in your account. If your long leg is in-the-money and you would like to exercise, you can either do so in your app or contact us so we can help do it for you.

Keep in mind

An account deficit due to early assignment might result in a margin call. In these cases, Robinhood is likely to take action to cover your position for you.

How do I resolve an account deficit?

You can resolve an account deficit by depositing funds or closing positions.

Disclosures

Options trading entails significant risk and is not appropriate for all investors. Certain complex options strategies carry additional risk. To learn more about the risks associated with options trading, please review the options disclosure document entitled Characteristics and Risks of Standardized Options, available here or through https://www.theocc.com. Investors should consider their investment objectives and risks carefully before trading options. Supporting documentation for any claims, if applicable, will be furnished upon request.

For more information please see Robinhood Financial’s Margin Disclosure Statement, Margin Agreement and FINRA Investor Information.

Robinhood Financial LLC is a registered broker dealer (member SIPC). Robinhood Securities, LLC provides brokerage clearing services. Robinhood Crypto, LLC provides crypto currency trading. All are subsidiaries of Robinhood Markets, Inc. (‘Robinhood’).

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