How to close a position on Robinhood

To close a position on Robinhood, open the app or website, find the stock or other security you own in your portfolio, tap or click it, and select the sell button. Enter the number of shares you want to sell, choose your order type (market order sells immediately at the current price; limit order lets you set a minimum price), review the order, and confirm. The sale settles in one to two business days, and the cash appears in your account once settlement is complete.

The process is the same whether you own individual shares, fractional shares, or options contracts — the app walks you through each step. If you own multiple positions in the same security (perhaps from different purchases at different prices), Robinhood will ask which lot you want to sell, or you can let it use the default method, which is typically first-in-first-out.

Closing a position is different from placing a stop-loss order or setting a price alert. Closing actually sells your shares. A stop-loss order automatically sells if the price drops to a level you set, but you have to set it up in advance. If you simply want to be notified when a stock hits a certain price, use a price alert instead.

Key Takeaways

  • Market orders sell your shares right away at whatever price the market is offering; limit orders let you set a minimum price but may not fill if the stock doesn't reach that price.
  • After you confirm a sale, the order takes one to two business days to settle, and you cannot use the cash until settlement is complete.
  • If you own fractional shares, you can sell them the same way you sell whole shares — Robinhood handles the math automatically.
  • Selling at a loss or gain triggers tax reporting; Robinhood tracks your cost basis and will report the transaction to the IRS on Form 8949.

Market orders versus limit orders when closing

A market order sells your shares at the best available price right now. If you tap sell and choose market order, your order executes within seconds during market hours. The downside is that you do not control the exact price — it could be slightly lower than the last price you saw on screen, especially if the stock is moving fast or has low trading volume.

A limit order lets you set the lowest price you will accept. If you own a stock trading at $50 and you set a limit order to sell at $52, the order will only fill if someone buys at $52 or higher. If the stock never reaches $52, your order stays open until you cancel it or it expires. Limit orders are useful if you want to avoid selling at a price you think is too low, but they carry the risk that your shares never sell at all.

During market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays), both order types usually fill quickly. Outside market hours, Robinhood offers extended-hours trading, but spreads are wider and volume is lower, so limit orders are especially risky — they may not fill even if your price is reasonable.

What happens after you sell: settlement and cash availability

When you sell a stock on Robinhood, the order settles in T+2, meaning two business days after the trade date. During those two days, the shares are still technically yours, but Robinhood has promised them to the buyer. You cannot sell the same shares again or use the cash until settlement completes.

Once settlement finishes, the cash lands in your Robinhood account and you can use it to buy something else, transfer it to your bank, or leave it sitting. If you have a Robinhood Gold subscription (which costs money), you can use the cash before settlement through margin borrowing, but that is a separate feature and comes with interest charges.

Options contracts settle in one business day instead of two. If you sell an options contract, the cash is usually available the next trading day.

Selling fractional shares and multiple positions

Robinhood lets you buy and sell fractional shares — for example, 0.5 shares or 2.3 shares. When you close a position that includes fractional shares, you can sell the whole thing at once, and Robinhood calculates the proceeds automatically. You do not have to round up or down.

If you bought the same stock multiple times at different prices, Robinhood tracks each purchase separately. When you sell, the app asks which lot you want to sell — you can pick a specific purchase, or let Robinhood use its default method. The default is usually first-in-first-out (FIFO), meaning the oldest shares sell first. This matters for taxes: selling your oldest shares might trigger a different capital gain or loss than selling your newest ones.

You can also choose specific lots if you want to manage your tax outcome — for example, selling shares you bought at a higher price to realize a loss. Robinhood shows your cost basis for each lot so you can make an informed choice.

Tax reporting when you close a position

When you sell a stock for more than you paid for it, you have a capital gain. When you sell for less, you have a capital loss. Both are taxable events that you must report to the IRS, even if Robinhood does not send you a form.

Robinhood tracks your cost basis (the price you paid) and reports all your sales to the IRS on Form 8949 and Schedule D. You will receive a copy of these forms by January 31 of the year after you sell. If you sold shares in multiple lots or at different times, the form will list each sale separately.

Capital gains are taxed differently depending on how long you held the shares. If you held them for more than one year, they are long-term gains and usually taxed at a lower rate. If you held them for one year or less, they are short-term gains and taxed as ordinary income. Robinhood's tax documents will note the holding period for each sale.

Closing options positions

Closing an options contract works the same way as closing a stock: find the contract in your portfolio, tap it, select sell, choose your order type, and confirm. Options settle in one business day instead of two.

If you own a call or put option and it is approaching expiration, you have three choices: sell it to close, let it expire worthless (if it is out of the money), or exercise it (if you have a call and want to buy the stock, or a put and want to sell it). Most traders close options by selling them rather than exercising, because selling captures any remaining time value. Robinhood will warn you if an option is about to expire and give you the chance to close it.

Common reasons a close order might fail or not fill

A market order almost never fails during regular market hours, but it can fail if the market is closed or if there is a technical issue with Robinhood's systems. If your order is rejected, you will see an error message in the app explaining why.

A limit order can fail to fill if the stock never reaches your price. If you set a limit order to sell at $100 and the stock peaks at $99.50, your order stays open until you cancel it or it expires. Robinhood's default expiration is good-for-day (GFD), meaning the order cancels at the end of the trading day if it has not filled. You can change this to good-till-canceled (GTC) to keep the order open indefinitely, but you have to cancel it manually if you change your mind.

Outside market hours, limit orders are especially risky because volume is thin and spreads are wide. A limit order that would fill easily during the day might not fill at all during extended hours.

Frequently Asked Questions

Can I close a position if I have unsettled cash in my account?

Yes. Unsettled cash does not prevent you from selling. However, if you use unsettled cash to buy something new and then try to sell that purchase before the original cash settles, you may trigger a good-faith violation. Robinhood allows three good-faith violations in a 12-month period before restricting your account.

What if I sell a stock and then want to buy it back immediately?

You can buy it back right away — there is no waiting period. However, if you are trying to avoid a wash sale (selling at a loss and buying back within 30 days to claim the loss on your taxes), the IRS will disallow the loss. Wash-sale rules are tax rules, not Robinhood rules, so Robinhood will not stop you, but your tax return will be wrong if you do this.

Do I have to close my entire position, or can I sell just part of it?

You can sell as many or as few shares as you want. If you own 100 shares, you can sell 30 and keep 70. Just enter the number of shares you want to sell when you place the order.

What happens if I close a position but the order gets rejected after I confirm it?

Robinhood will notify you in the app and via email. Your shares remain in your account unsold. You can try the order again, or contact Robinhood support if the rejection message is unclear. Most rejections are due to technical glitches or market conditions, not account issues.

Can I set up an automatic close order for a certain date?

Robinhood does not have a scheduled sell feature. You have to close positions manually or use a stop-loss order (which triggers a sale if the price drops to a level you set). If you want to sell on a specific date, you have to remember to do it yourself.