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I receive an email from Robinhood today that I do not understand. (*value's fictional but in ratio)

Our records show that there wasn't a sufficient deposit or liquidation in your account yesterday to cover your Reg T call, and thus your call is now past due. Your account will be restricted from buying stock today to avoid worsening your Reg T call. If you've already purchased stock today, those positions will be liquidated.

Please sell stock for at least $0.80 in your Robinhood account as soon as possible in order to return your account to good standing. If no action is taken, we will sell a portion of your stocks later today to cover the call. Note that depositing cash is not sufficient, you must sell stock.

I have a Robinhood Gold (margin) account, which my App says is in "Good Health"

Account Total Market Value: $4.18
($1.99 as Gold Used & $2.19 as Portfolio)

Volatility: Low

Initial Requirement: $2.10

Margin Maintenance: $1.04

Today's Day Trade Limit: $4.60

Robinhood Gold: $2.00

Gold Used: $1.99

AML Holding period $0.006

Total Original Deposits: $2

The only action I did yesterday was add 1 share to my position @ $0.046. Can someone please explain what is wrong or does this seem like an erroneous automated message?

Almost every resource I've found online suggests that Reg T does not apply to Margin accounts.

Except Nasdaq Regulation T Call.

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  • 1
    reddit.com/r/RobinHood/comments/6le895/… similar situation maybe.
    – Dustin
    Commented Mar 2, 2018 at 22:41
  • How much cash is in the account?
    – David Schwartz
    Commented Mar 3, 2018 at 9:07
  • by cash, do you mean how much of the "Account Total Market Value" is mine or do you mean how much is literally in a cash position as opposed to tied up in a stock position?
    – Dustin
    Commented Mar 3, 2018 at 13:13
  • I meant how much literally in a cash position. But it sounds like, at least as of the time you got those numbers, you had to have met the reserve requirement even assuming zero cash.
    – David Schwartz
    Commented Mar 3, 2018 at 17:38
  • then effectively $0, everything was in my stock position, except the available buying power to add the single share.
    – Dustin
    Commented Mar 3, 2018 at 17:42

1 Answer 1

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Regulation T requires that at least 50% of the money you are trading with be your money. If you fail to meet this requirement, stocks will be sold to both reduce what you're borrowing and increase what you're holding until the required 50% margin is met. This only applies to margin accounts.

So, for example, if you hold stocks worth $4.00, your account must be worth at least $2.00, which means you cannot borrow more than $2.00.

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  • My entire equity is in a holding. per OP I deposited $2, grew to ~$2.2, switched to Gold and received "Robinhood Gold: $2.00" of which i am using "Gold Used: $1.99". Account market value is $4.18 (and rising) ($1.99 Gold & $2.19 Portfolio). I hope this explains better the situation and thank you for the reply.
    – Dustin
    Commented Mar 3, 2018 at 13:11
  • So I made a few day trades within the three days prior to this warning. example I have $2cash + $2margin, I enter then exit a position and now have $2.2 cash + $2margin, I then enter and exit a second position... Since half of the $0.2 profit from 1st position is due to margin, and 3 day settlement hasn't passed, does this mean that $0.1marginProfit is unsettled funds and is causing this warning?
    – Dustin
    Commented Mar 3, 2018 at 13:21
  • @Dustin I don't think so because I don't think the unsettled funds rule applies to margin accounts.
    – David Schwartz
    Commented Mar 3, 2018 at 17:38
  • So say we have $2 cash & $2 margin. We buy $3 of stock XYZ which has initial requirement of 50%, did we use A.($1.5 cash & $1.5 margin) or B.($2 cash & $1 margin)? In A we have the remaining $1 as ($.50 cash/$.50margin). In B the remaining $1(margin) would be useless since the minimum initial requirement for any stock is always 50%.
    – Dustin
    Commented Mar 9, 2018 at 13:25
  • @Dustin You always use cash first, margin last. The remaining margin is not useless -- it saves you from having a margin call if the value of your stock drops a little.
    – David Schwartz
    Commented Mar 9, 2018 at 18:04

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