How to Short Sell a Stock on Robinhood
Robinhood does not allow short selling for most account types
Robinhood's standard brokerage account does not offer short selling. You cannot borrow shares to sell them at a higher price and buy them back lower. This feature is restricted to a small number of users who meet specific requirements that Robinhood sets internally.
If you want to short sell through Robinhood, you need a Robinhood Gold account — Robinhood's margin account product — and you must meet Robinhood's minimum account value requirement. Even then, Robinhood limits which stocks you can short and how much you can borrow.
Short selling is riskier than buying stock because your potential loss is theoretically unlimited. If a stock price rises instead of falling as you expected, you must still buy it back at the higher price to close your position. Robinhood's restrictions exist partly because of this risk.
Key Takeaways
- Short selling on Robinhood requires a Robinhood Gold margin account with a minimum account value that Robinhood determines, typically several thousand dollars.
- Not all stocks can be shorted on Robinhood — the platform maintains a list of shortable securities that changes based on availability and Robinhood's policies.
- When you short a stock on Robinhood, you borrow shares, sell them immediately, and must buy them back later to return them to the lender.
- Robinhood charges interest on borrowed shares, and you must pay any dividends declared on those shares while you hold the short position.
- Your losses on a short sale can exceed your initial investment because stock prices can rise indefinitely.
Opening a Robinhood Gold account to access margin and short selling
Robinhood Gold is a paid subscription that gives you access to margin — borrowed money to trade with — and the ability to short sell. You can upgrade to Robinhood Gold from your existing Robinhood account through the app or website. Robinhood charges a monthly subscription fee for Gold membership, which varies but is typically under $10 per month for most users.
To open Robinhood Gold, you must have a minimum account balance. This threshold is set by Robinhood and is not published as a fixed number, but it typically ranges from $2,000 to $5,000 depending on your account history and Robinhood's current policies. Once you meet the minimum, you can request the upgrade directly in the app under Account settings.
Robinhood Gold also gives you access to margin buying power — the ability to borrow money to purchase stocks beyond your cash balance. Short selling uses this same margin system, but in reverse: you borrow shares instead of money.
Checking which stocks are shortable on Robinhood
Robinhood maintains a list of stocks you can short, and it changes frequently. Not every stock on the market is available to short through Robinhood. Stocks that are thinly traded, newly listed, or in high demand to borrow may not appear on Robinhood's shortable list.
To learn about a specific stock can be shorted, search for it in the Robinhood app and look for a note on the stock's detail page. If short selling is available, you will see an option to short the stock when you open a position. If no short option appears, that stock is not currently shortable on Robinhood.
You can also contact Robinhood support to ask whether a specific stock is shortable. The list changes based on market conditions and the availability of shares to borrow from Robinhood's lending partners, so a stock that is not shortable today may become shortable later.
How to place a short sell order on Robinhood
Once you have Robinhood Gold and have confirmed the stock is shortable, open the stock's page in the app. Tap the trade button (usually a dollar sign or arrow icon). Instead of the default "Buy" option, you will see a toggle or menu that lets you switch to "Sell" or "Short Sell." Select the short sell option.
Enter the number of shares you want to short and choose your order type: market order (sells immediately at the current price) or limit order (sells only if the price reaches a specific level you set). Review the order details, including the number of shares and the price, then confirm the order.
Once your short sell order fills, Robinhood borrows the shares on your behalf, sells them at the price you received, and credits the proceeds to your account. You now owe Robinhood those shares and must buy them back to close the position.
Understanding borrowing costs and fees on short positions
When you short a stock on Robinhood, you pay interest on the borrowed shares. This is called the borrow fee or short interest rate. The rate varies depending on how hard the stock is to borrow — stocks that many people want to short or that have few shares available to borrow carry higher rates.
Robinhood deducts the borrow fee from your account daily or monthly, depending on the stock. You can see the current borrow rate for a stock before you short it; this information appears on the stock's detail page or in your position details after you open the short.
You are also responsible for paying any dividends declared on the stock while you hold the short position. If the company pays a dividend, Robinhood deducts that amount from your account and pays it to the share lender. This is another cost of holding a short position.
Closing a short position and buying shares back
To close a short position, you must buy back the shares you borrowed. Open the stock's page, tap the trade button, and select "Buy" (not "Short Sell"). Enter the number of shares equal to your short position and place the order. When the order fills, you own the shares, which are immediately returned to the lender, and your short position closes.
You can close a short position at any time, as long as the market is open. There is no deadline to buy the shares back, but the longer you hold the position, the more borrow fees and potential dividends you will owe. If the stock price rises, you will buy back the shares at a higher price than you sold them, resulting in a loss.
If the stock price falls, you buy back the shares at a lower price than you sold them, and you keep the difference as profit (minus borrow fees and dividends). This is how short selling makes money — but only if the stock price moves in the direction you predicted.
Risks of short selling and margin calls on Robinhood
Short selling carries risks that buying stock does not. When you buy a stock, your maximum loss is the amount you invested — if the stock goes to zero, you lose 100 percent. When you short a stock, your loss is theoretically unlimited because the stock price can rise indefinitely, and you must still buy it back at whatever price it reaches.
If your account value falls below Robinhood's maintenance requirement while you hold a short position, Robinhood can issue a margin call. This means you must deposit more cash into your account or close positions to bring your account back above the minimum. If you do not respond to a margin call, Robinhood can close your short position (and other positions) without your permission to protect itself.
Short squeezes are another risk. If many people short the same stock and the price rises sharply, short sellers rush to buy back shares to limit losses. This buying pressure can drive the price even higher, creating large losses for short sellers. Robinhood may also restrict short selling on a stock during extreme volatility, leaving you unable to close your position when you want to.
Frequently Asked Questions
Can I short sell with a regular Robinhood account?
No. Short selling is only available through Robinhood Gold, which is a paid margin account subscription. A standard Robinhood account allows you to buy and sell stocks but not to borrow shares for short selling.
What is the minimum account balance to short on Robinhood?
Robinhood does not publish a fixed minimum, but you typically need several thousand dollars in your account to open Robinhood Gold and short sell. The exact amount depends on Robinhood's current policies and your account history. Contact Robinhood support to confirm the current requirement.
Do I have to pay taxes on short selling profits?
Yes. Profits from short selling are taxable income. If you hold the short position for less than one year, the gain is taxed as short-term capital gain at your ordinary income tax rate. If you hold it longer than one year, it may may have access to for long-term capital gains rates, though this is less common with short selling.
What happens if a stock I shorted gets delisted?
If a stock is delisted, you still owe the shares to the lender. Robinhood will require you to close the position, usually at the last available price before delisting. You may face significant losses if the stock price has risen sharply before delisting.
Can Robinhood force me to close a short position?
Yes. Robinhood can close your short position without your permission if your account falls below the maintenance requirement, if the stock becomes unavailable to borrow, or if Robinhood restricts short selling on that stock due to market conditions. You will receive notice, but Robinhood is not required to wait for your approval.