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Debunking misinformation: Yes, you own the shares you buy through Robinhood

Debunking misinformation: Yes, you own the shares you buy through Robinhood

The past few months have shown us the importance of transparency about how our business and our industry works. In keeping with that, we wanted to respond directly to a recent Reddit post, which inaccurately implies that customers don’t own the shares they buy through Robinhood.

To be clear: You own the shares you buy through Robinhood as soon as your order is executed. Period.

No, we don’t engage in contract for difference (CFD) trading, which is a type of forex trading. Robinhood Securities is a clearing broker dealer, not a market maker, and we don’t sell shares short.

The two-day settlement period works the same at every brokerage, including Fidelity, TD Ameritrade, and Charles Schwab. You can learn more about the two-day settlement process here. We have called to shorten the settlement period.

Downgrading from a margin to a cash account won’t impact your ownership or the price of the shares you hold, nor will transferring your shares to another brokerage.

The bid-ask spread is determined by the national best bid and offer (NBBO). Neither we nor the market makers have the ability to set the spread — the best prices available on all market venues combined set the spread. We are required to route market orders immediately for execution and the orders our customers enter, combined with the orders of all investors and market participants, determine how wide the spread is at any given time.

Jim Swartwout is the President and COO of Robinhood Securities.

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