Robinhood democratized stock trading with its commission-free model and mobile-first design. While primarily known for beginner-friendly stock and crypto trading, Robinhood offers margin trading through its Robinhood Gold subscription ($5/month) with lower interest rates (5.75%) compared to traditional brokers. It is a simple entry point for US investors who want basic margin capabilities.
Pros & Cons
✅ Pros
- Zero commission trading
- Very beginner-friendly mobile app
- Low margin rates with Gold (5.75%)
- Fractional share trading
- SIPC insured
- Available to most US residents
- Simple, clean interface
- Instant deposits
❌ Cons
- Maximum 2x leverage (Reg T only)
- No futures or advanced derivatives
- Limited order types
- No international markets
- Payment for order flow (PFOF) concerns
- Limited research and analysis tools
- Controversial history (GME restrictions)
- US only
Fee Structure
Margin Tiers
| Tier | Max Position | Max Leverage | Maintenance Margin |
|---|---|---|---|
| Reg T Standard | Varies | 2x | 25-50% |
How to Sign Up for Robinhood
Robinhood FAQ
Robinhood offers margin through its Gold subscription ($5/month). You can borrow up to 2x your account value (Reg T margin). The first $1,000 of margin is included with Gold, with additional margin at 5.75% interest.
Robinhood Gold members pay 5.75% annual interest on margin borrowing above $1,000. This is competitive compared to traditional brokers who often charge 8-13%.
Robinhood is SEC/FINRA regulated and SIPC insured (up to $500,000). However, margin trading itself carries risk regardless of platform. Start with small amounts and understand the risks.
Yes, but the Pattern Day Trader rule applies: if you make 4+ day trades in 5 business days, you need at least $25,000 in your account.