I'm using margin. Why do I have negative buying power?

There are a few reasons why your buying power may be negative. Here are some examples:

Margin Requirements

If your portfolio value drops below margin requirements, your account will display negative buying power. This doesn’t necessarily mean that you’re in a margin call, but you do need positive buying power to buy stocks or options.

Early Assignment on a 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 see negative buying power 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 may become negative. 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 want to exercise, please contact us so we can help exercise it for you.

Keep in mind

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

How do I increase my buying power?

In general, you’ll get more buying power when you deposit more funds into your account, and the value of your account holdings is increasing.

You can increase your buying power by depositing funds, selling stocks, ETFs, or options. If you are not in a margin call, you can also wait for your portfolio value to rise.

Disclosures

All investments involve risk and loss of principal is possible.

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’).

© 2020 Robinhood Financial LLC. Robinhood®

Before you begin

If you are not using margin, check out I'm not using margin. Why do I have negative buying power?.

Reference No. 20200619-1222074-3687249
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Robinhood means Robinhood Markets and its in-application and web experiences with its family of wholly owned subsidiaries which includes Robinhood Financial, Robinhood Securities, Robinhood Crypto, and Robinhood U.K.

All investments involve risk and loss of capital.

Securities trading is offered to self-directed customers by Robinhood Financial. Robinhood Financial is a member of the Financial Industry Regulatory Authority (FINRA).