What are the limitations and restrictions of cash accounts on Robinhood when trading digital currencies?

1 answers

• Roy HensensJan 08, 2025 · 7 months ago
  As an expert in the field, I can tell you that cash accounts on Robinhood have certain limitations and restrictions when it comes to trading digital currencies. First, with a cash account, you can only use the funds that you have deposited into your account. This means that you cannot trade on margin or borrow money to invest in cryptocurrencies. Additionally, cash accounts do not have access to instant deposits, so you will need to wait for your funds to settle before you can use them for trading. Another restriction is the pattern day trading rule, which applies to cash accounts as well. If you make more than three day trades within a five-day period, your account will be flagged as a pattern day trader and you will need to maintain a minimum account balance of $25,000. Finally, it's important to note that cash accounts on Robinhood do not offer advanced trading features like limit orders or stop-loss orders. These limitations and restrictions are in place to protect investors and ensure fair trading practices.
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