Robinhood's paper trading feature lets you practice buying and selling stocks, options, and crypto with virtual money instead of real cash
Paper trading on Robinhood is called Robinhood Snacks or the Paper Trading account, depending on which platform you're using. It gives you $25,000 in virtual funds to place trades in real market conditions — same prices, same timing, same order types — without risking actual money. This is useful if you're learning how markets work, testing a strategy before committing real capital, or simply getting comfortable with how the app works.
The account resets daily at market open, so any gains or losses you make during a trading day don't carry forward. This means paper trading is best for learning the mechanics of placing orders and understanding how different securities move, not for tracking a long-term strategy.
Key Takeaways
- Paper trading accounts start with $25,000 in virtual money and reset daily, so they're designed for learning, not for testing strategies over weeks or months.
- You access paper trading through the Robinhood app by toggling a setting — it's not a separate account you have to open.
- Paper trades execute at real market prices during real market hours, so you see how orders actually fill in live conditions.
- Paper trading does not charge commissions or margin interest, so the costs you see are not the same as what you'd pay with real money.
How to turn on paper trading in the Robinhood app
Open the Robinhood app and go to your Account tab (usually the bottom-right icon). Scroll down and look for Settings, then tap Investing. You should see a toggle for Paper Trading or Practice Mode. Turn it on.
Once you enable it, the app will show you a paper trading account with $25,000 in virtual cash. Your real account is still there — you're just switching between the two views. You can toggle back and forth as often as you want, so you can practice in paper mode and then switch to your real account when you're ready.
If you don't see the paper trading option in Settings, check that your Robinhood app is up to date. Older versions may not have the feature, or it may not be available in your state yet.
What you can and cannot do in paper trading
In paper trading, you can place stock orders, options trades, and crypto orders just as you would in a real account. You can use market orders, limit orders, and stop orders. You can also practice selling short, though the mechanics work the same way as in a real account — you're borrowing shares and selling them, then buying them back later.
What you cannot do is use margin or leverage. Your $25,000 is cash, and you can only spend what you have. You also cannot use certain advanced order types that Robinhood offers to real accounts, such as trailing stops or conditional orders. Commission and margin interest are both zero in paper trading, so the cost of trading is not realistic — in a real account, you'd pay commissions and interest on borrowed money.
How paper trading orders fill during market hours
Paper trades fill at the same prices and at the same time as real trades during market hours (9:30 a.m. to 4 p.m. Eastern on weekdays when the market is open). If you place a limit order to buy 10 shares of a stock at $50, and the stock hits $50 during the day, your order will fill just as a real order would. If the stock never reaches your price, your order stays open until you cancel it or the market closes.
After market hours (4 p.m. to 8 p.m. Eastern) and before market open (8 a.m. to 9:30 a.m.), Robinhood offers extended-hours trading for real accounts, but paper trading does not participate in extended hours. Your paper trades only execute during regular market hours.
Why paper trading resets daily and what that means for you
Every morning at market open, your paper trading account resets to $25,000 and all your previous positions are cleared. This design choice means paper trading is meant for practicing individual trades and order types, not for building and holding a portfolio over time.
If you want to test a longer-term strategy — say, buying and holding a stock for three months — paper trading won't work for that. You'd need to track it manually in a spreadsheet or use a separate paper trading platform that doesn't reset. But if you want to practice placing orders, understanding how limit orders work, or seeing how fast an options order fills, the daily reset is fine because you're learning something new each day anyway.
Paper trading vs. real trading: what's different
The biggest difference is that paper trading has no commissions and no margin interest. In a real Robinhood account, stock and options trades are commission-free, but if you borrow money to trade (margin), you pay interest on the borrowed amount. Paper trading doesn't charge this, so your returns look better than they would in real life.
Paper trading also doesn't include the psychological pressure of real money. You might place a trade differently when $5,000 of your own money is on the line than when you're trading with virtual cash. That's not a flaw in paper trading — it's a reason to use it first, then move to real money in small amounts once you're confident.
Execution can also differ slightly. In paper trading, your orders fill at the bid or ask price depending on the order type, just like real orders. But during fast market moves or with low-volume stocks, real orders sometimes fill at worse prices than you expected (called slippage). Paper trading doesn't always show this, so your fills may look cleaner than they would be in reality.
Moving from paper trading to a real account
When you're ready to trade with real money, you can deposit funds into your Robinhood account and start placing real trades. You don't have to close or delete your paper trading account — you just toggle it off and trade normally. Your paper trading history stays in the app, so you can go back to it later if you want to practice again.
Start small. Many people who do well in paper trading lose money when they switch to real money because the psychology is different. Consider placing your first real trades with a small amount — maybe $100 or $500 — just to get used to the feeling of real risk. Once you're comfortable, you can increase the size.
Frequently Asked Questions
Can I keep my paper trading positions overnight or over the weekend?
No. Your paper trading account resets every morning at market open, so all positions are closed and you start with $25,000 again. This is by design — the account is meant for practicing individual trades, not for holding positions long-term.
Does paper trading show me realistic commissions and fees?
No. Paper trading has zero commissions and zero margin interest, even though real Robinhood accounts charge margin interest if you borrow money. Stock and options trades are commission-free on Robinhood, so that part is realistic, but the lack of margin interest makes paper trading cheaper than reality.
Can I practice options trading in paper mode?
Yes. You can place options orders in paper trading just as you would in a real account, and they fill at real market prices during market hours. However, you won't see the full complexity of options pricing (like implied volatility changes) in the same way you would with a dedicated options simulator.
What happens if I lose all my paper trading money?
Your account resets to $25,000 the next morning at market open, so you get a fresh start. This is one reason paper trading is useful for learning — there's no penalty for mistakes, and you can try again the next day.
Can I use paper trading on Robinhood's web version?
Paper trading is primarily available through the Robinhood mobile app. The web version may have limited or no paper trading functionality, so check your app settings if you want to use it.