Robinhood is one of the leading trading platforms in the US, and around the world. For many people, it is the first service to introduce them to the concept of trading, essentially lowering the technical and intellectual barrier for this type of financial activity. For this reason, it has gained a significant level of popularity and intrigue, both in the world of crypto and in the traditional markets, leading people to wonder about how to withdraw buying power From Robinhood.
However, the economic landscape is ever-changing and constantly morphing, meaning that people's desires and aims constantly alter along with it. This is especially true when it comes to trading. For this reason, there are many people out there who are looking for how to withdraw buying power from Robinhood, and even how to transfer buying power from Robinhood to their bank.
This is a relatively simple concept, and process, which takes minimal effort and knowledge. However, even with this in mind, it makes sense to gain as much insight about the topic as possible, and to learn about some potential pitfalls and confusing elements that you may stumble into during this process. For instance, some people face an issue where Robinhood says you have no buying power, without understanding why.
This is just one question that might get raised in the process. However, we will be exploring other questions as well. Plus, we will take a look at some alternative places you can take your buying power to, such as banks and exchanges like Binance, Kraken, and Coinbase. These are all reasonable options to keep in mind, as it is good to regularly contemplate whether you are handing your money as best as possible.
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Table of Contents
Why Choose Robinhood?
Before we jump into how to withdraw buying power from Robinhood, or how to transfer buying power from Robinhood to a bank, it is worth giving a quick run-through of what makes people turn to Robinhood in the first place. For starters, Robinhood has positioned itself in a really fascinating place in the financial world, acting as essentially the primary onboarder for those who are looking to trade.
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When the company started out, it was functioning almost exclusively in the US, filling a space in the market for individuals who were interested in trading without having to jump through a swath of hoops. At the time, when it was released, there were few simple and streamlined methods for the everyday person to get involved in this part of the financial arena.
By everyday person, we mean somebody who does not have a formal education in economics, and who does not trade on behalf of a company or organization. These are referred to as retail investors, and they are a huge part of the trading landscape nowadays. Some could argue that their major involvement in the industry is largely due to Robinhood successfully onboarding and introducing them to the space.
One aspect of Robinhood that is so appealing is its zero-fee commission trading, meaning that people can invest in the stock market without being charged any costs. The platform even allows for fractional shares to be bought, meaning that high-priced stocks can still be accessible to the general public by buying percentages of them instead of whole shares. This is perfect for people who do not want to spend much straight away.
Not only this, but Robinhood supports cryptocurrency trades, which is something that not every stock trading platform offers, as many brokerage sites view crypto as its own separate beast that does not require their involvement. Despite crypto and stock both being lucrative asset classes, some platforms see them as having wildly different user bases. As such, it can be hard to find both being supported in one place.
Nowadays, the trading world has opened up to a tremendous degree, and so there is much more variety for the consumer. As a result, this has led to people wanting to learn how to withdraw buying power from Robinhood so that they can try some other competing platforms and services. This may sound like a bad thing, but in truth, market diversity is a healthy part of the financial space as it can create good competition.
Understanding Buying Power
Buying power is a common phrase used in the financial markets, but it is not one that often gets defined in discourse. In basic terms, buying power is simply the amount of money you have to purchase something. But what does buying power mean on Robinhood? Essentially, it refers to the amount of money that an investor has available to make trades.
It is the amount of capital that is in a user's account after considering any unsettled funds or margin requirements. Robinhood's buying power is determined by the user's cash balance, the amount of money that is currently settled in their account, and any unsettled funds that may be available for trading. Additionally, if a user has a margin account, their buying power may be increased by the amount of margin they have available to trade.
You might be reading this and wondering, what is margin? This is the act of borrowing money from a broker to purchase investments, such as stocks or crypto. When an investor uses margin, they are essentially borrowing money to increase their buying power and potentially gain higher returns on successful trades. Margin activity on Robinhood allows investors to borrow money from them for future actions.
Another major factor that can affect your buying power is whether you have any pending orders or trades. This is an order to buy or sell an asset that has not yet been executed. This means that the order has been submitted to the market but has not been filled yet. It could take the form of a limit order, which is an order to buy or sell an asset at a specific price, or a stop order, which is an order to buy or sell a security once it reaches a specified price.
This is not unique to Robinhood, or to the world of retail trading. Rather, buying power is an ever-present aspect of the whole trading landscape, from the lone individual all the way up to the institutional investor. In a nutshell, it is simply how much money you have available to make purchases. At its core, this is what buying power means on Robinhood.
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Getting Buying Power on Robinhood
If you're new to the platform, then it is likely that Robinhood will say you have no buying power. Naturally, you'll probably be interested to know how you can get some. Similar to other platforms, you'll need to complete identity verification and link a bank account or a credit card as a source for your funding.
The length of time it takes to pass all the relevant checks for verification can vary, although Robinhood claims it should take between 5-7 days. If you are planning to engage in crypto activity, then it is worth considering some exchanges that can be almost instantaneous at times, such as Binance or Kraken. The wide variety of time it takes depends on how different services handle KYC (Know Your Customer) and AML (Anti-Money Laundering regulations).
Once verified, you can then start adding buying power. Let’s use an example to illustrate this more clearly. When you begin, the chances are Robinhood says 0 buying power is attached to your account. To add some, you can begin by depositing money from your bank account or via a card. Another method would be to send crypto over from an exchange, such as Coinbase or KuCoin.
Once you have made some investments, your buying power can increase if you make profits on some trades, and then cash out those trades into your Robinhood account. Of course, this is heavily dependent on successful activity occurring, and in the same sense, buying power can easily deplete, too, through unfortunate financial moves happening. With the state of flux that the global economic landscape is in, both possibilities are very much likely.
Why Don't I Have Buying Power on Robinhood Crypto?
Robinhood Crypto is a specialized part of the Robinhood ecosystem, focused exclusively on cryptocurrency trading. It is a gateway for people to buy and sell digital assets such as Bitcoin, Ethereum, Dogecoin, and many others with ease. One exciting reason why some people opt for Robinhood Crypto over other parts of Robinhood is that it functions 24/7, rather than having a strict market open and close.
If Robinhood says 0 buying power is found for your crypto, then it could be caused by there being no money left from any prior deposits, or possibly even because your funding sources (such as your bank account or credit card) have been unlinked. This can sometimes happen if you had to cancel a card or had to change banks at some point.
Another possibility is that your account has been restricted. Just like with any centralized platform, Robinhood reserves the right to lock or put stoppages on your account for a number of reasons. If you violate Robinhood’s terms of service, then you could find yourself with a nullified or reduced account. This can be triggered by allegations of insider trading or market manipulation; both very serious offenses.
Closely tied to this is the possibility that you may own two or more accounts at Robinhood. This company works on a one-account-per-person system, and so getting multiple accounts is considered a violation of the company’s terms of service. Realistically, it would be very hard to set up two Robinhood accounts and have them function simultaneously as Robinhood ties your account to your social security number, so this is relatively unlikely.
Another huge reason why Robinhood could say 0 buying power is in on your account is if you have been flagged for other suspicious behaviors. If activity on your account, such as unusual login attempts or large deposits or withdrawals, are found then they may restrict your account while they investigate the activity. This is done to both protect your account and prevent fraud or unauthorized access.
Suspicious behavior also obviously includes sending crypto to criminal locations or networks such as dark web markets or to wallets associated with scammers. Actions like this could mean your account may be restricted or even terminated. Robinhood is required to comply with all applicable laws and regulations related to financial transactions, and they have strict policies in place to prevent access should suspicions be raised.
Of course, the vast majority of hypothetical reasons why you don't have buying power on Robinhood Crypto are extremely easy to avoid by simply acting cautiously and legally. Robinhood is designed to be open and friendly to all, and so generally people do not run into issues like this unless they are engaging in improper conduct. If all you want to do is innocently trade, then you are unlikely to run into any issues of this sort.
Insufficient Buying Power
Sometimes you might find that you have money on your account, but sadly not enough, and so you may not be interested to learn how to withdraw buying power from Robinhood. Rather, you may be interested in learning why there is not enough buying power on Robinhood for you. This is a tough question to answer because it will depend on what you plan or intend to buy, relative to how much power you already have.
If you think you should have a higher buying power than you do, meaning you either deposited quite a bit, or you can see that you had some well-performing trades, then one of the best options to do is to call Robinhood’s customer service. They have a dedicated team to help you out and can hopefully fix the situation and shed light on the matter.
What sometimes happens with traditional transactions is that the underlying code fails and needs a little nudge to keep matters running smoothly. This happens both in crypto and in traditional methods of finance. Another reason you could have not enough buying power on Robinhood is that the assets you want to invest in have raised in price.
This can happen with any asset, but it is especially common with crypto as it is so volatile. The solution could be to wait for the asset to decrease in price (which is always risky), or learn how to withdraw buying power from Robinhood and focus on other matters. It might sound defeatist, but in many circumstances, it makes the most sense to cut your losses and move onwards.
If you do not have enough buying power on Robinhood to make the trades that you want, then your easiest option would be to add more buying power by depositing more money via an external source. You could also sell some of the assets that you already own on Robinhood, which would give you more buying power, as this would put money into your account. In this sense, buying power shares some similarities with liquidity.
Withdrawing Buying Power on Robinhood
This might initially sound strange, but there is no explicit method on how to withdraw buying power from Robinhood. This is no fault of the company, but rather it is because buying power is more of a concept. It is the culmination of wealth in your account that you can use to buy other assets. It is not exactly money, but a range of things with monetary value that reside in your account.
That being said, you can learn how to withdraw money, which is practically the same thing as learning how to withdraw buying power from Robinhood. If you want to withdraw fiat cash from your account, you will need to sell any assets and investments you own and wait for the settlement period to end.
The settlement period is the time between when a trade is executed and when the trade is officially “settled”, which means that the securities are transferred from the seller to the buyer and the payment is made. During this time, the transaction is considered "unsettled." The settlement period is two business days for stock trades and one business day for options trades.
After this, the money should appear in your Robinhood account in the form of cash, not in the form of investments or other assets. You can then send the money to your bank account. This will likely be the bank account that you initially linked to your Robinhood account to add buying power in the first place. Although, it does not have to be. Make sure your bank details are accurate before withdrawing. This is how to transfer buying power from Robinhood to a bank.
If you want to know how to withdraw buying power from Robinhood to your cryptocurrency wallet of choice, then this can also be done. In the past, this was not possible, but since early 2022, Robinhood made this available. The process is similar to learning how to transfer buying power from Robinhood to a bank, but are some key differences. Once you have sold all your assets to fiat, you will then want to buy your coin or token of choice with that fiat through the platform. After that, you can then withdraw the crypto by sending it to a wallet of your choice that operates off the platform.
This is a free process, although you will incur standard transaction fees that would be applied to any crypto transaction, mostly regardless of what platform you use. Once you have done this, you then simply wait for the funds to arrive in your wallet. The speed at which this happens depends on how congested the cryptocurrency you chose is, and can also be slowed down by errors on Robinhood's part as they are a centralized project, and so humans manage it.
Remember that no matter what method you use, profits on assets are oftentimes taxable, so you should keep a log of your activity so that you can file accurate tax info to whatever country you reside in. This is even true if you are withdrawing to crypto, depending on the asset and the laws of your country. It is important to keep this in mind as working out taxes on trades can be daunting, and so it is worth consideration.
Taking Your Buying Power Elsewhere
You have now learned what to do if you do not have enough buying power on Robinhood, how to withdraw buying power from Robinhood, and how to transfer buying power from Robinhood to a bank. But where should you go with this power once it is transferred? There are a wide range of alternatives that you should look into, but overall, it will be dependent on what you are looking for as an investor, and on personal preference.
If you are commonly asking yourself “why don't I have buying power on Robinhood Crypto?”, among other crypto-related questions, then you will likely want to find a platform that supports digital assets. With this in mind, what better place to go than a crypto-specific exchange such as Binance, KuCoin, or Coinbase? These are all veterans in the industry, and are highly regarded by crypto users.
Note, however, that moving to a crypto exchange might limit your exposure to other asset classes, so if you are eager to engage in stocks, you might want to think twice before moving all of your buying power. You could, instead, withdraw some buying power from Robinhood and leave some on their platform as well. This way you get the best of both worlds!
This might sound nonsensical, as Robinhood supports crypto anyway, so what would be the point of engaging in crypto on a separate platform and keeping with stock trades on Robinhood? One simple reason is that sites like Binance and KuCoin offer a tremendous range of coins and tokens, the likes of which Robinhood cannot compete with just yet. If you are someone who likes to diversify your digital assets then Robinhood can feel restrictive.
A caveat of doing this is that it could cause you to not have enough buying power on Robinhood to perform certain trades, as you will now be splitting your power between two or more places. This is the nature of diversification, and while it is not a bad thing, it is certainly something to keep in mind as it can stop you in your tracks if you plan to make any quick trades.
You could also choose to move to another stock platform entirely. While Robinhood is a market leader for retail trading, it is by no means the only option on the market. Depending on your country, there may be a tremendous range of platforms and services to check out. You could even consider a physical broker if you want a more personal experience.
While traditional stock platforms will not usually offer crypto trades, you can still do this yourself via decentralized exchanges, or you could choose to invest in Coinbase stock, which many platforms will offer, too. Of course, this is no substitute for a direct investment in crypto, but Coinbase is so intertwined in the crypto world that activity that affects the market will also affect its stock price.
It is good to check out many different alternatives after you learn how to withdraw buying power from Robinhood, but remember that this is not a finite and permanent action. If you try other places and decide that none of them suit your needs quite like Robinhood, then there is nothing stopping you from returning. Doing so will prevent Robinhood from saying you have no buying power, as that power will be brought back.
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Conclusions
It is important to learn how to withdraw buying power from Robinhood as doing so shows that you have complete control over your financial activity, and that you know how to take care of your investments. You should now know how to do this, what exactly buying power means on Robinhood, and even what to do if Robinhood says you have 0 buying power.
Knowledge like this is great as it arms you with the insight to take yourself elsewhere and experiment with other platforms. These could be other stock trading sites, or they could be crypto platforms like Binance or Coinbase. Of course, you should make sure that the place you go to can cater to your needs, as no two financial services are the same.
Moving elsewhere will be especially appealing for anybody who has found their account flagged for reasons beyond their understanding. This can lead people to ask “why don't I have buying power on Robinhood crypto?” or on other parts of the Robinhood platform, at no fault of their own. For people stuck in this position, learning how to withdraw buying power from Robinhood is a liberating experience as it lets them act more comfortably.
Regardless of your reasons to move, it is important that you find a platform that works best for you, your portfolio, and your financial goals overall. Trading is an intense activity, and so it is best to go somewhere which can mitigate as many stressors that could frustrate or overly complicate the process. Shop around and stay open-minded, and you will likely find a great service that fits your desires.
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