Account Limitations

Day Trade Restrictions

You’ll be prevented from making day trades in the instances listed below.

Pattern Day Trader (less than $25,000) 

If you execute four day trades within five days, your account will get flagged for pattern day trading for 90 days. As a pattern day trader, if your account value is less than $25,000, you won’t be able to day trade until your account value closes normal market hours above $25,000, or until the ninety-day period passes. If you end the day session above 25,000, you can day trade without restriction unless your account falls below the $25,000 threshold, at which point your day trading restrictions will return.  

Active Day Trade Call

You can’t day trade while you’re in a day trade call. You can resolve your day trade call by depositing funds, but you won’t be able to day trade until the market closes. This means that if you cover your day trade call on Monday after market close, you won’t be able to day trade until Wednesday’s market open.

Uncovered Day Trade Call

If you don’t cover your day trade call within the five-day window, you’ll be restricted from day trading for ninety days. Unfortunately we’re not able to remove this restriction once it’s placed on your account. 

Sell-Only Restrictions

Margin Call

You won’t be able to buy stocks, options, or cryptocurrencies when you’re in a margin call. You’ll need deposit funds or sell stock to cover your margin call. If you don’t cover your margin call, a broker from Robinhood may sell a portion of your portfolio to cover your call. Once your call is resolved, you’ll be able to buy stocks again on the next trading day.

Regulation T Calls

If you find yourself in a Reg T call, it’s because you haven’t met the initial requirement for the stocks you’ve bought. The initial requirement is simply the value amount of cash or marginable stocks you need to have in your account in order to buy a stock. The initial requirement for all stocks is 50%, which means you need to have at least 50% of your purchase backed by cash or marginable stocks. If you don’t have the assets to back your purchase, you can either deposit cash to cover your call, or you can sell off stocks in your account.

If you choose to sell stocks in your account, you have two options:

  1. Sell Marginable Stocks: Marginable stocks have a maintenance requirement of less than 100%. You’ll need to sell twice the amount of your Reg T call because these stocks get 50% release from sales.

 Example

If your call amount is $100, you’ll need to sell $200 of marginable stocks. $200 * (0.50) = $100.

  1. Sell Non-Marginable Stocks: Non-marginable stocks have a 100% maintenance requirement. You’ll need to sell 1x the call amount because these stocks get 100% release from sales.

 Example

If your call amount is $100, you’ll need to sell $100 of non-marginable stocks. $100 * (1.0) = $100.

If you don’t cover your call, we’ll have to prevent you from buying additional stocks and sell off enough stock to cover your call.

Day Trading While Restricted

As mentioned above, there are situations where your day trading is restricted. If you execute a day trade while your day trading is restricted, you won’t be able to buy stock for 90 days.

Other

Restrictions may be placed on your account for other reasons. Some of these reasons include:

  • Transfer Reversals
  • Incorrect or Outdated Information
  • Fraud Inquiries
  • Account Levies

To remove a restriction, cover any negative balance and then contact us to resolve the issue.

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