How to Short Stocks on Robinhood

Shorting on Robinhood requires a Gold subscription and a margin account

Robinhood does not allow shorting on a standard cash account. To short a stock on Robinhood, you must first upgrade to Robinhood Gold (the paid subscription tier) and convert your account to a margin account. Once you have Gold and margin enabled, you can borrow shares from Robinhood's lending pool and sell them at the current price, betting that the price will fall so you can buy them back cheaper later.

The process itself is straightforward once your account is set up: you search for the stock, tap the sell button, and select "short" instead of "sell." Robinhood will show you the borrow fee (the cost of borrowing the shares) before you confirm. The catch is that shorting ties up your buying power and carries real financial risk — if the stock price rises instead of falls, your losses are theoretically unlimited.

Key Takeaways

• Robinhood Gold costs $5 per month and is required to short stocks; a standard cash account cannot short under any circumstances.
• Your account must be converted to a margin account, which means Robinhood can lend you money and charge interest on borrowed funds.
• Borrow fees vary by stock and change daily; stocks that are hard to borrow cost more, and some stocks cannot be shorted at all on Robinhood.
• Shorting ties up your buying power dollar-for-dollar, so a $1,000 short position removes $1,000 from the cash you can use for other trades.
• You must close the short position (buy back the shares) before you can withdraw the proceeds, and Robinhood can force you to buy back at any time if the shares become unavailable to borrow.

Upgrading to Robinhood Gold and enabling margin

To short, start by subscribing to Robinhood Gold. Open the app, tap the account icon (bottom right), scroll to "Robinhood Gold," and select the subscription. You will be charged $5 per month, and the subscription renews automatically unless you cancel it.

After Gold is active, you must convert your account to a margin account. Go to Account Settings, find "Margin," and toggle it on. Robinhood will ask you to confirm that you understand the risks — margin accounts allow Robinhood to lend you money and charge interest on borrowed cash. Once margin is enabled, the short option becomes available on any stock Robinhood allows you to short.

Your account will have a margin requirement, which is the minimum amount of cash or securities you must hold to keep your short positions open. Robinhood typically requires 30% of the short position's value in margin. If your account falls below this threshold, Robinhood will issue a margin call and may force you to close positions or deposit cash.

Finding the borrow fee and checking if a stock can be shorted

Not every stock can be shorted on Robinhood. Stocks that are hard to borrow, newly listed, or in low supply are often unavailable. To check whether a stock is shortable, search for it in the app and look at the stock detail page. If shorting is available, you will see the borrow fee displayed as an annual percentage rate (APR) — for example, 2.5% per year.

The borrow fee is deducted from your account daily, calculated on the dollar value of your short position. If you short $1,000 worth of stock at a 2.5% annual borrow fee, you pay roughly $0.07 per day. High-demand short stocks can have borrow fees of 10%, 20%, or higher, which adds up quickly. Before you short, calculate whether the stock would need to fall enough to cover the borrow fee and still profit.

Borrow fees change daily based on supply and demand. A stock that costs 1% to borrow today might cost 5% tomorrow if many traders want to short it. Robinhood shows you the current fee before you confirm the short, so you can see the exact cost before you commit.

How to place a short order

Once your account has Gold and margin enabled, open the stock you want to short. Tap the "Sell" button (not "Buy"). A menu will appear with two options: "Sell" and "Short." Select "Short."

Enter the number of shares you want to short. Robinhood will show you the current bid price, the borrow fee, and how much buying power the short will use. Review these details carefully — the price shown is the price you will receive for the borrowed shares, not a may provide fill price. Tap "Review Order," confirm the details, and submit.

Your short order will execute at market price (or the limit price you set, if you use a limit order). Once filled, the borrowed shares appear in your account as a negative number, and the cash from the sale is added to your account balance. You now owe Robinhood those shares and must buy them back to close the position.

Closing a short position and understanding forced buybacks

To close a short, you buy back the shares you borrowed. Search for the stock, tap "Buy," enter the number of shares you shorted, and submit the order. Once the buy order fills, your short position closes and the shares are returned to Robinhood's lending pool. Any profit or loss is locked in at that moment.

Robinhood can force you to close a short position at any time if the shares become unavailable to borrow or if your account falls below the margin requirement. This is called a forced buyback or forced liquidation. You have no control over the price at which Robinhood buys back — it could be much higher than the price you shorted at, turning a potential profit into a loss. Forced buybacks are rare but happen most often with highly volatile stocks or stocks with very limited shares available to borrow.

You cannot withdraw the cash from a closed short position until the settlement period ends. Robinhood uses a two-business-day settlement window, so cash from a closed short is available to withdraw or trade with on the second business day after the close.

Margin calls and account maintenance

When you short on margin, Robinhood requires you to maintain a minimum amount of equity in your account relative to your short positions. If your account value falls below this threshold — either because the stock price rises (making your short loss larger) or because you withdraw cash — Robinhood will issue a margin call.

A margin call means you must either deposit cash into your account or close positions to bring your account back into compliance. If you do not act within the timeframe Robinhood specifies (usually same-day or next-day), Robinhood will automatically close positions, starting with the ones that are losing the most money. This can lock in large losses and is one of the biggest risks of shorting on margin.

To avoid margin calls, monitor your account balance and the price of stocks you have shorted. If a stock you shorted rises sharply, your loss grows and your margin requirement increases. Many traders set stop-loss orders (automatic buy orders at a higher price) to limit losses, though this does not may provide a fill at that price in a fast-moving market.

Costs and risks specific to shorting on Robinhood

Shorting on Robinhood costs money in three ways: the $5 monthly Gold subscription, the daily borrow fee, and any losses if the stock price rises. The borrow fee is the most variable cost — it depends on how hard the stock is to borrow and how long you hold the short. A stock with a 20% annual borrow fee costs roughly $0.55 per day per $1,000 shorted, which adds up to $165 per year.

The financial risk of shorting is asymmetrical. When you buy a stock, your maximum loss is the amount you invested (if the stock goes to zero). When you short, your maximum loss is theoretically unlimited — if the stock price doubles, triples, or rises 10x, your loss grows without limit. Robinhood's margin requirement and forced buyback rules are designed to protect Robinhood from this risk, but they can force you to close a losing position at the worst possible time.

Robinhood also charges interest on any margin cash you borrow (separate from the borrow fee on shorted shares). If you use margin to short, you pay both the stock borrow fee and margin interest, which compounds your costs. Most traders short without borrowing additional cash, so this applies only if you short more than your account balance allows.

Frequently Asked Questions

Can I short a stock on Robinhood without Gold?

No. Shorting requires both Robinhood Gold and a margin account. A standard cash account cannot short under any circumstances, even with Gold. You must upgrade to Gold ($5 per month) and convert to margin to access shorting.

What happens if a stock I shorted gets delisted?

If a stock is delisted, Robinhood will force you to close the short position, usually at the last available price before delisting. You will be forced to buy back the shares at whatever price Robinhood executes, which could result in a significant loss. This is rare but a real risk with penny stocks and distressed companies.

Can I short fractional shares on Robinhood?

No. Shorting is only available for whole shares. You cannot short 0.5 shares or any fractional amount, even though Robinhood allows fractional share purchases and sales in regular trading.

What is the minimum amount I need to short on Robinhood?

Robinhood does not publish a minimum short position size, but you must have enough buying power to cover the margin requirement (typically 30% of the short value). In practice, this means you need at least a few hundred dollars in account equity to short most stocks.

Do I owe taxes on a short position that is still open?

No. You owe taxes only when you close the short and lock in a gain or loss. Once you buy back the shares, the profit or loss is realized and taxable in the year you closed the position. Short-term capital gains (positions held under one year) are taxed as ordinary income.