Robinhood Update to Crypto Buying Power

avatar

robinhood.jpg

When trading both stocks and crypto from the same account on Robinhood, it is good to be aware of the differences in settlement periods after selling and how it changes the buying power.

My understanding was the for stocks there is settlement period and for cryptocurrencies settlement is immediate. Based on the settlement period we know how soon we can use the funds for trade again or when we are able to withdraw the funds. Also, violating the settlement period, or in other words using the funds before settlement may get an account suspended for some time. However, most brokerages I believe won't let you use the funds in those situations.

Today, I received an update email from Robinhood informing that unsettled funds from sale of stocks can be used to buy cryptos. Here is what they say:

We're writing to let you know that you may once again use unsettled funds from the sale of stock, options, and ETFs to purchase cryptocurrencies immediately.

Your Crypto Buying Power should now include any unsettled funds from past sales.

Well, that's great. I wish I knew this a few days earlier. Last week I bought some Twitter stocks before Twitter decided to permanently ban Trump and others from the platform. I also bought some Ethereum. Unlucky me, I thought by the weekend!

At that point I had to place a pre-market order to sell Twitter as soon as possible and cut my losses. At the same time Bitcoin and Ethereum drops happened. But I knew there is higher probability for Eth to recover and I would buy more to cost average my Eth position. But that money is stuck on Twitter, and after it was sold on Monday morning I still would have to wait for settlement period.

I thought settlement for stocks was T+3. Just found out that was changed to T+2. Still have to wait three days.

Now Robinhood says, we don't need to wait and can immediately use the unsettled funds to buy crypto. I welcome the change and will keep that in mind and take advantage of the funds if opportunity presents again.

Posted Using LeoFinance Beta



0
0
0.000
4 comments
avatar

You were quite unlucky with the timing, but I think your Eth investment will pay off over time.
Specially if you are DCA.
By the way this news are good news! ;)

Posted Using LeoFinance Beta

0
0
0.000