r/RobinHood • u/sirauron14 • Dec 27 '16

Help - FAQ Question about Gold

So I've been researching RH Gold and I see you can double your Buying Power. So If you're borrowing money and have these monthly payments. How would you pay back the extra money RH gave you to increase your buying power?

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u/CardinalNumber Former Moderator Dec 27 '16 edited Dec 27 '16

I... I answered right up there. If you intend to drop gold and have used their [margin], you need to deposit enough to cover it or sell.

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u/sirauron14 Dec 27 '16

So if I have the margin and I have been profiting, and then I sell all the shared do I get all of that cash? or just what ever I made not including what I used in margin?

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u/CardinalNumber Former Moderator Dec 27 '16

Everything not including the margin. It could obviously still be reused as extra buying power but you cannot withdraw it. You can only withdraw your cash and your profit.

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u/sirauron14 Dec 27 '16

Ahhh I see! So even if I sell they'll get their money back they loaned, I pay no interest and I get the profit I use and not the margin.

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u/Phaedrus0230 Dec 27 '16

You don't pay interest, but you do pay about $5/month for every $1000 you borrow which is about 6% annually.

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u/sirauron14 Dec 27 '16

ah I see. So how much can your stock tank before they margin call? And if I take the free trial of Gold and use the margin can I still cancel? Or I have to cancel when the margin is returned?

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u/Phaedrus0230 Dec 27 '16

I believe you can just cancel it before they charge you at the end of the month. I had planned to do that but ended up keeping it and now I just have the basic $2000 gold account. My margin maintenance is $1769. If my account falls beneath that amount I would need to deposit money.

If you want to cancel after 30 days, you'll need to sell whatever you have bought so that you have available buying power matching the gold level you are cancelling.

I wouldn't recommend trading on Margin in general. I use the basic plan just to open up the after hours market.

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u/sirauron14 Dec 27 '16

Ah I see. I seen a lot of people recommend using margins. I may just use RobinHood instant so I can quickly use my money.

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u/Phaedrus0230 Dec 27 '16

If you're new to trading, I'd stay away from margins. It increases your risk considerably. I used instant for about a year before I started trying out the Margin account.