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Robinhood Margin

The Margin Investing feature allows you to borrow money from Robinhood to buy securities. This allows you to receive additional funds based on the value of certain securities in your brokerage account. Margin investing can add flexibility to your capital: if you see an opportunity in the market and want to invest more, you can invest immediately without having to deposit in the bank.

Unlike instant deposits, which you start by default, access to margin investing is not automatic—you must upgrade to Robinhood Gold and apply for eligibility.

If you're eligible, signing up for Robinhood Gold and applying for margin investing can give you additional buying power. This extra purchasing power means you can borrow money from us to invest.

Here are two examples of margin trading:

Example 1: Profit

Let's say you deposit $5,000 in cash and borrow $5,000 as margin to buy 100 shares of stock at $100 per share - a total of $10,000.

Since your initial purchase of $5,000 was purchased on margin, your portfolio value (minus all cryptocurrency positions) is $5,000 ($10,000 - borrowed amount = $5,000).

If the stock rose to $125 per share, the stock would now be worth $12,500. Since your original purchase of $5,000 was purchased with margin, you now have $7,500 in portfolio value and owe $5,000 in used margin.

In this case, if you don't invest on margin and only buy as many shares as you can with available cash (50 shares for a total of $5,000), your unrealized gain would be $2,500 instead of $1,250.

Note: Cryptocurrency positions are not included in your portfolio value because cryptocurrencies are not securities but are held by our subsidiary Robinhood Crypto, LLC.

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Example 2: Loss

Let's say you deposit $5,000 in cash and borrow $5,000 as margin to buy 100 shares of stock at $100 per share - a total of $10,000.

Since your initial purchase of $5,000 was purchased on margin, your portfolio value (minus all cryptocurrency positions) is $5,000 ($10,000 - borrowed amount = $5,000).

If the stock falls to $75 per share, the stock is now worth $7,500. Since your original purchase of $5,000 was purchased on margin, you now have a portfolio value of $2,500 and owe $5,000 in used margin.

In this case, if you don't invest on margin and buy as many shares as you can (50 shares for a total of $5,000) with only available cash, your unrealized loss is $2,500 and your loss is $1,250.

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disclose

All investments involve risk, including loss of capital. None of the facilities are FDIC insured. All examples are hypothetical and do not represent actual or expected results. The content is for informational purposes only; it does not constitute investment advice, nor is it a recommendation for any security, account type or functionality or trading strategy. Past performance is no guarantee of future results.

Margin investing comes with interest charges and risks, including the possibility of losses exceeding your deposits or the need to provide additional collateral in a down market. Before using margin, clients must decide whether this type of trading strategy is right for them based on their specific investment objectives, level of experience, risk tolerance and financial situation.

Regardless of the underlying value of the securities you purchase, you must repay your margin obligations. Robinhood Financial may change its margin requirements at any time without notice. If the equity in your account falls below the minimum maintenance requirement (which varies by security), you will be required to provide additional cash or acceptable collateral. If you do not meet the minimum requirements, Robinhood Financial may be compelled to sell some or all of your securities with or without your prior consent.

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As of March 23, 2022, the margin rate calculated by Robinhood Financial is 3%. Interest rates are subject to change at any time and at the sole discretion of Robinhood Financial.

For more information, see FINRA's Investor Alert and Robinhood Financial's Customer Relationship Overview, Margin Disclosure Statement and Margin Agreement. These disclosures contain important information about Robinhood Financial's products and services, conflicts of interest, lending policies, interest charges, and risks associated with margin-eligible accounts.

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Cryptocurrency trading and custody services are provided through Robinhood Crypto accounts. Robinhood Crypto is not a member of SIPC or FINRA. Robinhood Crypto and Robinhood Financial are separate but related companies. Cryptocurrencies are not securities and your cryptocurrency investments are not protected by FDIC insurance or SIPC. For more information, see Robinhood Crypto Risk Disclosure.

Robinhood Financial LLC (member of SIPC) is a registered broker. Robinhood Securities, LLC (member SIPC) provides brokerage clearing services. Robinhood Crypto, LLC offers cryptocurrency trading. All of these are subsidiaries of Robinhood Markets, Inc. ("Robinhood"), traded on Nasdaq under the name HOOD. 

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