When a margin call takes place, the brokerage platform can force the sale of securities or other assets in your account to make up for losses. What Is a Margin Call?Ī margin call occurs when an account's value falls below a certain amount. If you start to show losses that are greater than the limit set by the broker, this can lead to Robinhood making a margin call. This cost can eat away at your investment the longer you hold it. You'll also be paying interest on any borrowed cash throughout the duration of the investment. With margin, it’s possible to lose not only the borrowed money but also the value of the securities in your cash account. It’s vital to remember that when you use a margin account, it could result in both major profits or huge losses. This way you can open larger positions to magnify your results. It lets you leverage more money without having to sell off any of the assets in your current portfolio. This allows you to invest more money than you could otherwise. Investing on margin means that you’re borrowing money from your broker to buy stocks. With or without Robinhood Gold, you do not have to enable margin. Margin trading on Robinhood is completely optional. Robinhood will calculate your charge daily and debit your account at the end of each billing cycle. If you use more than $1,000 of margin, you’ll pay 7.25% yearly interest on the amount you use above $1,000. The platform will also include your first $1,000 of margin. Robinhood will charge you $5 every 30 days at the beginning of your billing cycle. Get 1 Free Fractional Share Worth $5 To $200įor $5 a month, you get all the Robinhood Gold premium features.
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