How to Short a Stock on Robinhood – Complete Guide

In this article, we’ll look at how to short a stock on Robinhood.

Ordering your investing decisions in the flow of purchasing cheap and selling high does not guarantee stock market wealth.

In reality, as with shorting a stock on Robinhood, the opposite might also be true: selling high and buying low.

Because you’ve bet on the company’s stock going down instead of up, this strategy is fraught with danger.

Some investment sites, such as Robinhood, enable you to short stocks, bonds, index funds, and other assets, while others don’t.

Robinhood and Webull are two popular investment applications that have only been on the market for a few years.

This article examines how to sell stocks short on these two Millennial-friendly investing apps [including if you can short a stock on Robinhood and Webull] and how to do it.

short a stock on robinhood
Photo credit: Forbes

What is Short Stock Position on Robinhood?

Open a short position: In investing jargon, opening a short position is borrowing shares of stock to short sell because you believe the price will decline.

You’ll get a certain amount of shares from your broker at this point, and you’ll sign a brokerage contract to borrow the shares.

Does Robinhood Allow Short Selling?

Shorting stocks on Robinhood is currently not feasible, even with a Robinhood Gold membership, allowing Robinhood investors to leverage their earnings by using margin.

Instead, inverse ETFs or put options must be used.

Why you can’t Short Sell on Robinhood

Because it does not allow short selling, you must open a margin account with a brokerage that does.

Short-selling brokers frequently have margin account requirements that are similar to Robinhood’s.

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Shorting stocks traditionally entails borrowing shares from a broker and selling them on the open market.

You want the stock’s value to drop so you can repurchase the shares at a reduced price.

Your profit is simply the difference between the price you paid and the price you received – it’s that simple.

The Most Shorted Stocks on Robinhood

  • 38.1 percent of the float is shorted in Rocket Companies,
  •  36.3 percent in Blink Charging (NASDAQ: BLNK),
  • And 30.4 percent in GameStop (NYSE: GME).
  • Senseonics Holdings owns 28.3% of the company.
  • FuboTV: 27.9% Nano Dimension: 28 percent
  • 27.3 percent, according to TherapeuticsMD.
  • Inovio Pharmaceuticals (NASDAQ: INO) has a market capitalization of $25.8 billion.
  • Sundial Growers (NASDAQ: SNDL) has a 24.4 percent market share.
  • Castor Maritime has a 23.7 percent share of the market.

The Reason Why Short Selling is Bad

The potential for limitless losses is an essential issue with short selling.

You can never lose more than your invested capital when you buy a stock (go long).

However, if the stock rises to $100, you’ll be required to pay $100 to liquidate the trade. A short sale has no limit on how much money you can lose.

Watch the video below to learn more on how to short a stock on Robinhood:

How to tell if a Stock is Being Shorted

  • Go to the NASDAQ website in your browser.
  • In the blank space beneath the Get Stock Quotes header, type the stock’s symbol. Underneath the blank, click the blue Info Quotes button.
  • From the drop-down menu in the center of the screen, select Short Interest.

You can’t be short on Robinhood, unfortunately. That’s OK. There are numerous methods to trade and be a bear while still profiting as a trader.

While short selling is a risky endeavor, the earnings or gains it can generate are frequently appealing.

And with the knowledge of how to profit financially when a stock’s price falls, you can do so.

Even in bear markets, you can benefit from Robinhood.

However, we recommend that you first grasp the basics of short selling and assess markets properly.

Going into a trade or investment blindly might result in significant losses.


About Author

short a stock on robinhood
Carlos James
I am a creative writer, researcher and strategic digital marketer who is focused on providing value to the community through my contents and creatives.

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