Robinhood Margin Explained | What It Is And How To Use It | (FAQ)
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In today's video we discuss what investing on margin is, how to use it safely and how to use it to your advantage. We talk about margin maintenance, initial margin requirements, how to pay back margin on robinhood, robinhood gold, margin buying, margin calls, and more.
Investing on margin can help you achieve massive gains in a short amount of time, but also comes with risks that you NEED to be aware of. Make sure to invest wisely and at your own risk.
I am not a financial advisor. You should not make investment decisions based off of my recommendations. Do your own research and invest at your own risk. Links you find in my videos may be affiliate links in which I get paid a referral fee.
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Thank you for a thoroughly explained video. From my experience in investing, having made more than 6 figures net profit over the past few years, I'd say having an expert handle your financial investments is the best way to earn passively and can also go a long way in helping you gain confidence to trade yourself. Not everyone is built for the ups and downs themselves, especially when starting out newly.
You are entirely correct. For the majority of people getting started, trading CAN be frustrating. There's more than one good way to approach it.
I've just turned 23 and I'm new to investing, and I've lost a good sum trying out strategies I found in online tutorials. I would sincerely appreciate any recommendations you have.
@@ashleycrawfd i agree with you. There are more ways to approach the market. I personally started out investing in REITS.
@@albert-sinclair.m Although I have a full grasp of just how and when to trade, I still leave the major pool of my investments in the hands Callum Garfield. I rely on his years of successful trading to keep me earning passively. I'm sure he can get you started as well. He does charge for his services, it'll help to have that in mind.
Well said! if were all built to handle the financial markets, there would be absolutely no need for pro traders.
Your videos were the most helpful on Robinhood margin. Thank you!
Awesome! I’m glad they helped!
well done, very straight forward
I appreciate the feedback
This was a phenomenal explanation. I appreciate it.
Thanks for watching!
Thanks! Learned a lot!
Thanks for watching!
Good video! Thanks got the help.
Thanks for watching!
Great Video. I want to use margin to trade options. I was thinking selling covered calls and cash secured puts. Possibly Iron Condors . What are your thoughts on that strategy?
You explained this very well.
This was a helpful explanation, thanks
I’m glad it helped, thanks for watching
hey i have a question i have 4,000$ of margin buffer will that money be added to my portfolio once i sell the stock? or no thanks!
U did an amazing job explaining everything
I mean. He basically just read the FAQ from Robinhood
I'm glad you enjoyed it!
Explained well!
Can you use 100% of the margin + your own money on selling covered cash puts?
how much does a stock have to fall for a margin call to happen?
Why does my RH says I’m not eligible for margin investment ?
It's interesting because I love this concept of leverage with real estate, but it freaks me out when thinking about using it for stocks!
Yeah I totally get that. I think it’s because margin calls are possible and it is entirely up to the brokerage and their decision
@@CodySteckRealEstateVideos I think as long as you have some money in your bank then all you have to do is just deposit into your broker. I guess as long as you have money reserved somewhere and ready for it to be used then it not really a problem in my opinion.
My bp says I have a larger figure. I go to make a trade and it says insufficient and will only allow my pre margin sum. Im reading they want me to completely deplete my BP before I can access the margin. Thats fking stupid. I attempted borrowing to trade with it. Not wipe myself out and go into hock. Correct me if im wrong
Excellent explanation
Question..
I’m confused, see below..
Margin Maintenance (MM) is stated as the minimum portfolio value (minus crypto positions) needed to maintain and avoid a margin call…
Is the portfolio value the number on the home page above the chart? Is the portfolio value the number listed as “total market value” in the investing tab? Or is the portfolio value the “total market value” in the investing tab minus your crypto?
Can you borrow money and withdraw it at Robinhood?
Thanks g
Thanks for watching!
I’m new in this stock business, I used the margin money, but this time, I got deficit , I didn’t realize, market will go so down, please tell me how can I solve it
Good vid broski
Thanks for watching!
Does your margin go up based on the account size? I know you said if you deposit more money then it will go up. But what if you become profitable. Do you have to apply for more margin or is it automatic?
Yes it is relative to account value and adjusts automatically.
Must the entire margin that you’ve used be paid in full each month? Wasn’t sure how that worked. For example, I used $3000 in margin today, & my next Robinhood Gold billing is in one week. Does that mean I’d need to have that $3000 covered by that date? Or can you carry over for several months & just pay down the interest? Thanks!
No, it acts as a line of credit and they charge you interest based on the $2,000 you have borrowed (first $1,000 is free)
Is that 2.5% interest on the $2000 he borrowed a flat rate so just $50 for the year or a compound interest rate every year? That $50 is divided by 12 which is monthly payment so would the monthly interest add up to 2.5% or does it compound past 2.5%?
@@marleyroberts7091
If you borrowed 2k for an entire year, you would face a flat 2.5% yearly interest, paid off monthly.
Which would look like your usual $5 for gold + 2,000 * (0.025 / 12) = $9.17 / mo
If you borrowed $2k one day, paid it back before end of that same day, at the end of that month you'd face an interest based off the daily interest rate(0.025/365) for the $2,000.
So you'd be charged your usual $5 for gold + 2,000 * (0.025 / 365) = $5.14 / mo
Hope that helps!
Hey bro great video! I have a question that I hope you can answer. I am highly interested in RH gold due to being able to access margin. I only want access to use this so I'm able to day trade as much as I'd like. With that said, lets say I have 12.5k in cash and 12.5k with margin to equal 25k...If I strictly make all my trades with no more than my cash value (12.5k), will I be required to pay any interest on margin? Also, is this possible, to be able to day trade infinitely without using the margin in your account to avoid the interest payments? I really just want to use margin to day trade as much as I'd like and eventually work my (cash) account up to at least 25k and then fully pay off the margin without ever paying interest. Lastly, If i am able to do this, will I be required to pay off my margin along the way with profits or can I wait to pay it once I reach 25k? Hope this makes sense & I look forward to your response. Thanks man!
I don't believe the margin will count towards the 25k account value required for day trading without restrictions. I'd have to double check this, however, regardless, if you borrow more than 1k on margin, you are going to have to pay interest. The margin is a line of credit, not just money that they "stick into your account"
I hooked you up with a free stock!
Hey! Let's go!
Question so if we take the loan without margin is the loan still 2.5 percent
What loan without margin? Margin is the loan.
Another good way to use the margin is use that interest free $1,000 to pay off something like a credit card that has stupid high interest.
Explain to me how that would work?if you can
@@bigbubbabuford all’s you have to do on RH is pay for the Robinhood Gold feature ($5 a month) and then enable margin. After that you can transfer it to your bank account or use to buy stocks/crypto.
@Alex Hernandez correct but it’s interest free, under 1K of margin borrowed.
Nice video
Let's say I have $5000, & I use $5000 of margin for a total of $10,000 on 1 stock. The margin maintenance requirement is 25%, so as long as the price doesn't fall lower than 25% of the $10,000 used, am I safe from a margin call? Sorry I'm new-ish to this & I want to make sure I'm not f'ng up my strategy.
I just got approved for 50000$ margin. What if I use this money to day trade and I buy at 8:30 and sell ay 9:30. Example : I make 500$ every day using the margin. How much $ will I have to pay per month ? Thank you for answering.
With 7.5% APR
The thing that in I'm still confuse is when do you have to pay it back? Exa: let's say you have a 10k portfolio and use 3k on margin, (2900 Maintenance requirement) and you don't add any more money to the portfolio what's gonna happen? You just keep paying the interest rate for that money you use? Is that how it works?
Yes, you keep paying for it as long as you have the borrowed money. You either have to sell stocks to pay it back or add money to your portfolio
Hi awesome video but i'm lost. I wanted to borrow 30k from Robinhood to purchase long term stocks. Can You explain how much interest for 5 years? Thank you
Hypothetically if I bought stocks on margin could I just hold them for however long or will Robinhood sell them for me. Or does it depend on whether the stock goes up or down?
You can hold them as long as you like, so long as the stock doesn't drop in price. If it does, robinhood may sell off those stocks to cover their loan.
@@CodySteckRealEstateVideos At what percentage loss would they sell off at?
@@CodySteckRealEstateVideos after how days, Robinhood sell the stocks?
@@InspireeeVideos every stock is different. With Hyliion, if it drops more than 45% I’d get a margin call.
Could you explain margin spending and gold buying power vs cash? If you deposit $1000, and have $2000 total margin, would you be able to then withdraw and deposit that $2000 and get $4000 margin? If so that's just a loan with a 2.5% interest rate right? I would lmao if Robinhood left in some infinite money looks like they usually do.
No, unfortunately they will not let you do that...
@@CodySteckRealEstateVideos This is because any money deposited goes to paying off margin right? I've had it where I was using margin but the money I deposited stayed as my cash
@@CodySteckRealEstateVideos how do you pay back margin?
Now a days, many people are out of money, because market is so down. Robinhood should do something now a days
So is it better to invest on Robinhood with or without margin ?
without
@@IvanPlayStation4LiFe thanks Ivan i agree did my research definitely without
Most people dont understand numbers, dont do enough research on their stocks they buy, dont have enough time to periodically look at the stock from 9 to 4 and dont know how to control themselves. Too impulsive. Margin training is for the smart and disciplined. If you know youre smart but youre not disciplined than def dont do it. Especially right now with how volatile the market is currently.
@@robmen1402 thanks for your insight very helpful, also probably saved me a couple bucks😂
What do you mean the first 1000 is free.
You need $2000 to get the $1000 margin ouch
you gotta pay to play
I am new to Robinhood. In total I have deposited $4000 into my account and put the money into different stocks. My balance is $4050 so I’m up $50 so far. I just purchased Robinhood gold, and my margin that I was given is $427 not the free $1000. I am assuming it’s because I’m only up $50 so far? If you could clarify this I would appreciate it. Thanks!
I'm not 100% sure why you only have access to $427 in margin. You should have much more than that if all of your funds have cleared. It doesn't have anything to do with your total return so far.
@@CodySteckRealEstateVideos my total pending deposits is $3000. Not sure if this is the reason? Thanks for the response anyways!
@@CodySteckRealEstateVideos My account has $11,687. I turned on margin just to see how much I can borrow. It says I can use $9,692. I think it's because I have a $200 deposit pending. It should go through by tomorrow and then I'll see what my limit is. I'm still not sure if I want to use margin though.
@@Andrew-Knecht that was the reason.
Buy doge with margin
Go big or go home, yeah?
Good video but please stop "swallowing" into the microphone...maybe a glass of water will help u
lol it wasn’t even a thought 💭 until I read this 😆.
I was thinking the same I had to turn this off it’s bad. Why are you swallowing like that?