Shorting a stock on Robinhood requires a Gold subscription and a margin account

Robinhood does not let you short stocks with a standard cash account. You need a Robinhood Gold subscription (which costs money each month) and you must convert your account to a margin account. A margin account lets you borrow money or securities from Robinhood to trade, but it also means you can lose more than you deposited.

The actual process of shorting — placing the order itself — works almost the same as buying a stock. The difference is in the setup beforehand and the risk you take on. This guide walks through what you need to do before you can short, how to place a short order, and what happens after.

Key Takeaways

  • Robinhood Gold costs between $5 and $10 per month depending on your account size, and you must pay this fee before you can short any stock.
  • You must enable margin borrowing in your account settings, which means Robinhood can lend you money or stock and charge you interest on the borrowed amount.
  • To short a stock, you search for it, tap the order button, select "Sell" instead of "Buy," choose the number of shares, and confirm — but you can only do this if margin is turned on.
  • Your short position stays open until you buy the shares back (called "covering"), and you pay interest on the borrowed shares for as long as the position is open.
  • Robinhood can force you to close a short position if the stock price rises too far or if you run out of buying power, which can lock in a loss.

Upgrade to Robinhood Gold and pay the monthly subscription

Open the Robinhood app and tap the account icon (usually at the bottom right). Scroll to find "Robinhood Gold" or "Membership" and select it. Robinhood will show you the current price — this varies based on your account balance, but typically ranges from $5 to $10 per month. Tap to subscribe and confirm the payment method.

Once you subscribe, you gain access to margin borrowing, which is what makes shorting possible. The subscription is separate from any interest you pay on borrowed shares. You keep paying the monthly fee as long as your Gold membership is active, even if you are not actively shorting anything.

Enable margin in your account settings

Having Gold is not enough — you must also turn on margin borrowing. In the app, go to your account settings (the gear icon or account menu), then look for "Investing" or "Account Settings." Find the option labeled "Margin" or "Margin Borrowing" and toggle it on. Robinhood may ask you to confirm that you understand the risks, including that you can lose more money than you have in the account.

When you enable margin, Robinhood assigns you a buying power amount — this is the total you can spend or borrow, and it is usually higher than your actual cash balance. For example, if you have $1,000 in cash, your buying power might be $2,000 or more. This borrowed amount costs you interest, which Robinhood charges daily and deducts from your account.

Search for the stock and place a short order

Find the stock you want to short by searching for its ticker symbol. Tap on the stock to open its detail page. Look for the order button — this is usually a large button at the bottom of the screen that says "Trade" or shows a buy/sell toggle.

Tap the button and you will see two options: "Buy" and "Sell." Select "Sell" — this is how you short on Robinhood. Enter the number of shares you want to short. Robinhood will show you the current price and calculate the total. Review the order and tap "Confirm" or "Place Order." The order executes at market price (or at your limit price if you set one), and the shares are now borrowed and sold.

After the order fills, you will see the short position in your portfolio. It will show as a negative number of shares, and you will see the current price, your entry price, and your gain or loss in real time.

Understand the costs and risks of holding a short position

Every day you hold a short position, Robinhood charges you interest on the borrowed shares. The interest rate varies — Robinhood publishes rates for different stocks, and some stocks are more expensive to borrow than others. This interest is deducted from your account daily, so your losses grow even if the stock price does not move.

If the stock price rises, your loss increases. Unlike a regular buy position where your loss is limited to what you paid, a short position can lose money indefinitely as the price climbs. If the stock price rises far enough, Robinhood may issue a margin call — a demand that you deposit more cash or close positions to bring your account back into compliance. If you do not respond, Robinhood can force-close your short position at whatever the current price is, locking in your loss.

Some stocks are also subject to a short squeeze, where the price spikes suddenly because many people are trying to cover their shorts at once. This can happen with stocks that have high short interest, and it can wipe out a short position very quickly.

Close your short position by buying the shares back

To end a short position, you must buy back the same number of shares you sold. This is called covering. Go to your portfolio, find the short position, and tap on it. Select "Buy to Cover" or the equivalent option. Enter the number of shares (usually it defaults to the full position), set your price if you want a limit order, and confirm.

When the order fills, your short position closes. If you bought the shares back at a lower price than you sold them for, you keep the difference as profit (minus interest and fees). If you bought them back at a higher price, you take a loss. The profit or loss is final once the position closes.

Know what happens if Robinhood recalls the borrowed shares

Robinhood borrows the shares from its own inventory or from other sources. In rare cases, the lender may recall the shares — meaning Robinhood must return them and you must buy them back when ready. Robinhood will notify you and give you a important date, usually a few days. If you do not cover by the important date, Robinhood will force-buy the shares at market price and close your position.

This is uncommon with large, liquid stocks but more likely with smaller or hard-to-borrow stocks. There is no way to prevent a recall, so it is a risk you accept when you short.

Frequently Asked Questions

Can I short a stock that is under $5?

Robinhood allows shorting of stocks under $5, but some brokers and regulators have restrictions on penny stocks. Robinhood's rules are less restrictive than many others, but you should check the specific stock's borrowing availability in the app before placing an order.

What is the minimum amount of money I need to short on Robinhood?

There is no stated minimum short position size, but you must have enough buying power to cover the margin requirement. With margin, your buying power is typically 2x your cash balance, so a $500 account might give you $1,000 in buying power. Robinhood Gold costs $5–$10 per month, so factor that into your costs.

Do I pay taxes on short gains?

Yes. Short-term capital gains (from positions held under one year) are taxed as ordinary income at your regular tax rate. Long-term capital gains (over one year) get preferential rates, but most shorts close much faster. You report gains and losses on Schedule D of your tax return. Robinhood sends you a 1099 form at year-end with your trading activity.

What happens if the stock gets delisted?

If a stock is delisted from the exchange, you can no longer trade it on Robinhood, but your short position does not automatically close. You may be forced to cover at a price set by Robinhood or the exchange, or the position may be transferred to a different market. Contact Robinhood support when ready if this happens.

Can I short on a Robinhood cash account?

No. Shorting requires a margin account, which requires Robinhood Gold. A cash account does not allow margin borrowing, so you cannot short stocks with a cash account under any circumstances.