Getting Started with Selling Stocks on Robinhood
Robinhood is a popular trading platform that allows users to buy and sell stocks, ETFs, and cryptocurrencies without paying commission fees. To start selling stocks on Robinhood, you’ll need to meet the platform’s eligibility requirements and have sufficient funds in your account.
Before you can begin trading on Robinhood, it’s essential to understand the basics of how the platform works and what you’ll need to get started. In this section, we’ll cover the eligibility and account minimum requirements, as well as how to fund your Robinhood account.
Eligibility and Account Minimum Requirements
To be eligible to trade on Robinhood, you must meet certain requirements, including:
- Being at least 18 years old
- Having a valid Social Security Number (SSN)
- Being a U.S. citizen, permanent resident, or visa holder with a legal address within the United States
In addition to these eligibility requirements, you’ll also need to have a minimum of $250 in your Robinhood account to start trading. This minimum balance ensures that you have sufficient funds to cover the cost of any stocks you wish to purchase or sell.
Funding Your Robinhood Account
Once you’ve met the eligibility requirements and have decided to open a Robinhood account, the next step is to fund your account. The most common way to do this is by initiating a bank transfer from your linked checking or savings account.
To deposit funds into your Robinhood account:
- Navigate to the “Account” tab in the Robinhood app
- Select “Banking”
- Choose “Transfer to Robinhood”
- Enter the amount you wish to transfer and confirm the transaction
It’s important to note that bank transfers can take up to five business days to process, so be sure to plan accordingly when funding your account.
Step-by-Step Guide to Selling Stocks on Robinhood
Now that you’ve met the eligibility requirements and funded your Robinhood account, you’re ready to start selling stocks. In this section, we’ll walk you through the process of selling stocks on the Robinhood app, step by step.
Accessing Your Portfolio and Selecting a Stock to Sell
To begin the stock selling process on Robinhood, open the app and navigate to your portfolio. Your portfolio displays all the stocks, ETFs, and cryptocurrencies you currently own. To sell a stock, simply tap on the stock you wish to sell from your portfolio.
Once you’ve selected the stock you want to sell, you’ll be taken to the stock’s detail page, which displays information such as the current price, your average cost, and the number of shares you own.
Entering the Sell Order Details
After selecting the stock you want to sell, tap the “Trade” button and then choose “Sell.” You’ll now need to enter the details of your sell order, including:
- Quantity: The number of shares you wish to sell
- Order Type: Choose between a market order (sell at the current market price) or a limit order (sell at a specific price or better)
- Price: If you selected a limit order, enter the minimum price at which you’re willing to sell your shares
It’s crucial to review these details carefully before submitting your sell order, as the order cannot be canceled once it’s been placed.
Reviewing and Confirming Your Sell Order
After entering your sell order details, take a moment to review the information to ensure accuracy. This includes the stock symbol, quantity, order type, and estimated proceeds from the sale.
If everything looks correct, tap “Submit” to place your sell order. Robinhood will then process your order and execute the sale when the specified conditions are met (i.e., the current market price for a market order or the minimum price for a limit order).
What Happens After You Sell Stock on Robinhood?
Once you’ve successfully sold your stock on Robinhood, you might be wondering what happens next. In this section, we’ll discuss the settlement period for stock sales and how to withdraw the funds from your Robinhood account.
Settlement Period for Stock Sales
When you sell a stock on Robinhood, the proceeds from the sale are not immediately available for withdrawal or reinvestment. This is because the sale must first go through a settlement period, which typically takes two trading days (not including weekends or holidays).
During the settlement period, the funds from your stock sale are considered “unsettled.” While you can use unsettled funds to purchase other stocks, you cannot withdraw them from your Robinhood account until the settlement period has passed.
Withdrawing Funds from Your Robinhood Account
After the settlement period has ended and your funds are no longer considered unsettled, you can withdraw them from your Robinhood account. To do this:
- Navigate to the “Account” tab in the Robinhood app
- Select “Banking”
- Choose “Transfer to Your Bank”
- Enter the amount you wish to withdraw and confirm the transaction
Keep in mind that the time it takes for the withdrawn funds to appear in your linked bank account can vary depending on your bank’s processing times. In most cases, you can expect the funds to be available within 1-3 business days after initiating the withdrawal from Robinhood.
Robinhood Stock Selling Fees and Limitations
One of the main draws of Robinhood is its commission-free trading model, which allows users to buy and sell stocks without incurring the traditional fees associated with stock trading. However, there are still some important considerations to keep in mind when it comes to fees and limitations on the platform.
Understanding Robinhood’s Commission-Free Model
Robinhood operates on a commission-free model, meaning that users do not pay fees for executing trades on the platform. This can result in significant savings compared to traditional brokerages, which often charge a commission for each trade.
However, it’s important to note that while Robinhood does not charge commissions, there may still be some regulatory fees associated with certain trades. These fees, such as SEC and FINRA fees, are typically small and are charged by regulatory bodies rather than Robinhood itself.
Restrictions on Selling Robinhood Stocks
In some cases, users may encounter restrictions or limitations when attempting to sell stocks on Robinhood. These restrictions can be due to various factors, such as:
- Account Limitations: New Robinhood accounts may be subject to certain restrictions, such as limited instant deposits or temporary holds on funds from stock sales
- Unpaid Shares: If you purchase a stock using unsettled funds and then attempt to sell that stock before the original purchase has settled, Robinhood may restrict your ability to sell those shares
- Pattern Day Trading: If you execute four or more day trades (buying and selling the same stock within a single trading day) within a five-day period, your account may be flagged as a pattern day trader and subject to additional restrictions
To avoid these restrictions, it’s important to familiarize yourself with Robinhood’s policies and to manage your trades accordingly. If you encounter any issues or have questions about selling stocks on Robinhood, the platform’s customer support team can provide further guidance.
See also:
