Robinhood is an American financial services company, that offers commission-free trading via its app. With Robinhood, you can trade assets like stocks, crypto, options, and more. If we’re talking about cryptocurrency trading, you can trade without a commission, but it depends on your location.
Robinhood has become a beloved service for investing among a lot of traders, first of all, because of the ease of use of the Robinhood app. That’s one of the reasons why Robinhood has attracted a lot of new-to-trading and inexperienced investors. To be fair, that goes in line with the initial company’s goal. As Vladimir Tenev said: “We want to provide everyone with access to the financial markets, not just the wealthy”. Robinhood also offers a set of additional tools and features called “Robinhood Gold”, which gives users access to larger instant deposits and to margin investing.
What is Share Lending (Margin Loan)
A margin loan is a form of borrowing that allows you to borrow money from the brokerage to invest. It will give you more flexibility in how you use your money, and give you a bigger return if your stock rises. The amount you can borrow is determined by the securities in your portfolio, the more assets you have, the more you can borrow.
Among experienced traders, margin loans are especially popular because they get access to additional funds for investments and allow to diversify portfolios. But it isn’t recommended for beginners to use this trading method because as the loan grows so do the risks – and inexperienced beginner traders can lose all their savings very quickly.
Does Robinhood offers Share Lending
Robinhood provides access to margin investing, but it isn’t automatic. In order to get this opportunity, you need to become a Robinhood Gold member. To do so, you need to apply for eligibility and, after confirming your membership, you will receive additional purchasing power, (borrowed funds). You will also pay a monthly fee of $5 as a “Robinhood Gold” member and you will get $1000 for interest-free marginal investment. Due to the increased risk, not all traders are suitable for this way of trading and many want to turn off Share Lending.
How to disable Share Lending on Robinhood
In order to disable Margins, you don’t need to spend extra time or wait for a long confirmation. Everything is done literally in a couple of clicks in the app and disabling this function is applied immediately.
If you want to disable margins on Robinhood – here’s what to do:
- Open the {Robinhood} app on your phone or tablet
- Tap on the {Account icon}, which is located in the bottom right corner of the screen
- Then scrool down and tap on {Settings}
- Tap on {Robinhood Gold} button
- Then tap on active button {Margin investing}
- Then in the very bottom of the screen you can see the option {Disable Margin Investing}
- Tap on {Disable Margin Investing}
Now, Share Lending would be disabled until you will re-enable it.
What is Instant Settlement on Robinhood
Another feature that may give you more free funds to re-invest in is Instant Settlement.
Instant Settlement is the ability to get instant access to the funds that you received when you sold stock or other transactions. In other words, if you sold $100 worth of stocks, you’ll be able to use them immediately, rather than waiting as a rule for 2 trading days.
If you have a “Robinhood Instant” account, then you will have access to instant deposits of up to $1000 and with a “Robinhood Gold” account, your amount will depend on your level in instant deposits.
As for cryptocurrencies, for “Robinhood Crypto”, your funds become available within 3 business days. However, for instant accounts all cash deposits and proceeds from cryptocurrency sales are available.
Splaitor doesn’t provide any investment, money management, or trading advice. Read our Disclaimer to know more.
