Robinhood does not charge a commission when you sell stocks, options, or most other securities

Robinhood made its name by eliminating the per-trade commission that traditional brokers charged. When you sell a stock on Robinhood, you pay zero dollars in commission fees to Robinhood itself. The same applies to selling options contracts, ETFs, and most other investments you hold in a Robinhood account.

However, "no commission" does not mean "no cost." Other expenses can reduce what you receive when you sell, and understanding the difference between commission and these other costs matters when you are deciding whether to sell now or later.

Key Takeaways

  • Robinhood charges no commission on stock sales, but you still pay the bid-ask spread — the difference between what buyers will pay and what sellers are asking.
  • The bid-ask spread varies by stock; liquid stocks like Apple or Tesla have narrow spreads, while less-traded stocks have wider ones.
  • Robinhood Crypto charges a spread on cryptocurrency sales that is typically 1 to 2 percent of the transaction, which is higher than the stock spread.
  • Options sales on Robinhood carry no commission, but the bid-ask spread on options can be much wider than on stocks.
  • Margin interest applies if you borrow money to buy securities and then sell at a loss or hold the position; this is not a selling fee but a borrowing cost.

The bid-ask spread is what you actually pay when you sell

Every stock has two prices at any moment: the bid (what buyers will pay right now) and the ask (what sellers are asking right now). When you sell, you receive the bid price, not the ask price. The difference between them is the bid-ask spread, and that gap is your real cost.

On a highly traded stock like Apple, the spread might be just a few cents per share. If the bid is $150.00 and the ask is $150.05, the spread is $0.05 per share. On a stock with less trading volume, the spread can be much wider — sometimes 50 cents or more per share. Robinhood does not set these spreads; they come from the market itself. Robinhood profits by keeping a small portion of the spread, but the spread exists whether you use Robinhood or another broker.

You see the bid price on your screen before you confirm the sale. If you sell 100 shares of a stock with a $0.10 spread, you lose $10 on the spread alone, separate from any commission.

Cryptocurrency sales on Robinhood Crypto carry a built-in spread

Robinhood Crypto operates differently from the stock side. When you sell Bitcoin, Ethereum, or other cryptocurrencies through Robinhood Crypto, you do not pay a commission, but Robinhood applies a spread that is typically 1 to 2 percent of the sale amount. This spread is built into the price you see — you are not shown a separate bid and ask the way you are with stocks.

On a $1,000 cryptocurrency sale, a 1.5 percent spread means you lose $15 to the spread. This is higher than typical stock spreads for liquid stocks, but lower than the spreads on very thinly traded stocks. The exact spread percentage varies based on market conditions and the specific cryptocurrency.

Options sales have no commission but often have wide spreads

Selling an options contract on Robinhood costs no commission, just like selling stock. However, options spreads are often much wider than stock spreads because options trade in lower volume. A stock option might have a bid-ask spread of $0.05 to $0.20 per contract, while a thinly traded option might have a spread of $0.50 or more.

Since one options contract represents 100 shares of the underlying stock, a $0.20 spread per contract costs you $20 when you sell. If you are selling multiple contracts, the cost multiplies. Before you sell an options contract, check the bid and ask prices on the screen to see what the spread actually is for that particular contract.

Margin interest applies if you borrowed money to buy

If you used Robinhood's margin feature to borrow money and buy securities, you pay interest on the borrowed amount. This is not a selling fee, but it reduces your profit when you sell. Robinhood's margin interest rate varies based on the amount you borrow and your account balance, but it typically ranges from around 5 to 12 percent annually.

Margin interest accrues daily and is charged to your account whether you sell or hold. If you borrowed $5,000 at 8 percent annual interest, you owe about $10.96 per day in interest. Selling does not eliminate this cost — it just stops it from accruing further once the position is closed and the borrowed money is returned.

Taxes on the sale are separate from trading costs

When you sell a stock or other security at a profit, you owe capital gains tax. This is not a fee Robinhood charges; it is a tax you owe to the IRS or your state. Robinhood reports your sales to the IRS on Form 1099-B, but the tax itself is your responsibility.

Short-term capital gains (on securities held less than one year) are taxed as ordinary income. Long-term capital gains (on securities held one year or more) receive preferential tax rates. The tax is due when you file your tax return, not when you sell. Understanding the difference between short-term and long-term gains can significantly affect how much you owe.

How to minimize costs when you sell

The bid-ask spread is unavoidable, but you can reduce its impact. Sell during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays) when trading volume is highest and spreads are typically narrowest. Avoid selling thinly traded stocks or options, where spreads are wider. If you must sell a low-volume security, use a limit order to set a minimum price you will accept, rather than a market order that sells when ready at whatever the current bid is.

For cryptocurrency, compare Robinhood Crypto's spread to other exchanges before you sell. Some exchanges charge lower spreads or allow you to trade directly with other users. For options, check the bid-ask spread before you sell; if it is very wide, you might wait for a moment when the spread tightens, or consider closing the position differently.

Frequently Asked Questions

Does Robinhood charge a fee to sell fractional shares?

No. Robinhood charges no commission on fractional share sales, just as it does on whole shares. You still pay the bid-ask spread, which may be slightly wider on fractional shares because they trade in lower volume than whole shares.

What is the difference between a market order and a limit order when selling?

A market order sells when ready at the current bid price, which means you accept whatever spread exists right now. A limit order lets you set a minimum price; the sale only happens if the bid reaches that price or higher. Limit orders protect you from selling during a temporary price dip, but they might not fill if the price never reaches your limit.

Do I pay taxes when I sell at a loss?

You do not owe capital gains tax on a loss, but you can use the loss to offset gains from other sales. If your losses exceed your gains, you can deduct up to $3,000 of net losses against ordinary income in a single tax year, with unused losses carrying forward to future years.

Can I sell stock after market hours on Robinhood?

Robinhood offers extended-hours trading (4 p.m. to 8 p.m. Eastern and 7 a.m. to 9:30 a.m. Eastern), but spreads are typically much wider during these times because fewer traders are active. Selling during regular market hours usually costs you less in spread.

What happens if I sell a stock I bought on margin and the price drops?

If you sell at a loss, you still owe back the full amount you borrowed, plus the margin interest that accrued. The loss does not reduce what you owe Robinhood. You can deduct the loss on your taxes, but that does not recover the money when ready.