How to sell a stock on Robinhood

To sell a stock on Robinhood, open the app, find the stock in your portfolio, tap it, and select the sell button. You'll enter the number of shares you want to sell, choose between a market order (sells immediately at the current price) or a limit order (sells only if the price reaches a number you set), review the details, and confirm. The cash from the sale lands in your Robinhood account immediately, though it takes one business day to settle — during that time you can use the money to buy other stocks, but you cannot withdraw it to your bank account.

The entire process takes less than a minute once you know where to tap. The main decision you'll face is whether to use a market order or a limit order, and that choice depends on whether you want the sale to happen right now or only if you get a certain price.

Key Takeaways

  • Market orders sell your shares immediately at whatever price the stock is trading at right now, while limit orders only sell if the price reaches the number you choose.
  • Cash from a sale appears in your account right away but takes one business day to settle, during which you can buy other stocks but cannot move the money to your bank.
  • You can sell a partial position — for example, 10 shares of a stock you own 50 shares of — without selling everything.
  • Robinhood charges no commission on stock sales, but the bid-ask spread (the difference between what buyers will pay and what sellers are asking) is the real cost of trading.

Market orders versus limit orders

A market order sells your shares at the best price available right now. You place the order and it executes almost instantly. The downside is that the price you see on your screen when you tap sell may not be the price you actually get — by the time your order reaches the market, the stock may have moved. For stocks that trade millions of shares a day, this slippage is usually just pennies. For smaller or less-traded stocks, the difference can be larger.

A limit order lets you name the price you want. If you own Apple at $150 and you want to sell only if it hits $155, you set a limit order at $155. The order sits in the market waiting. If the stock reaches $155, it sells. If it never reaches that price, the order never fills and you still own the shares. Limit orders are useful when you have a target price in mind, but they come with the risk that the stock bounces off your price and never comes back.

For most people selling a position they've decided to exit, a market order is simpler. For people trying to time a specific price or sell a small-cap stock where prices can swing, a limit order gives you more control.

What happens to your money after you sell

When your sale executes, the cash appears in your Robinhood account balance immediately. You can use that cash to buy other stocks right away — Robinhood lets you do this because the money is in your account, even though it hasn't technically settled yet. This is called unsettled cash.

Behind the scenes, the trade takes one business day to settle. During that one-day window, you can buy and sell with the unsettled cash, but you cannot transfer it to your bank account or withdraw it. Once the business day passes, the cash becomes settled and you can move it wherever you want. Weekends and market holidays don't count as business days, so a sale on Friday won't settle until Monday.

If you're a frequent trader, this matters because Robinhood has rules about how many times you can buy and sell in a five-day window. Those rules are separate from settlement and apply to your account type, not to individual trades.

Selling only part of a position

You don't have to sell all your shares of a stock at once. When you tap the sell button, Robinhood asks you how many shares you want to sell. If you own 100 shares of a stock, you can sell 30 and keep 70. The remaining 70 shares stay in your account and continue to move with the stock price.

This is useful if you want to take some profit but keep a position open, or if you're unsure whether you want to exit completely. You can also sell in stages — sell 30 shares today, 30 more next week, and hold the last 40 for longer. Each sale is a separate transaction with its own price and its own tax consequences if you're in a taxable account.

Understanding the bid-ask spread

Robinhood doesn't charge a commission on stock sales, but there is still a cost: the bid-ask spread. The bid is the highest price a buyer will pay right now. The ask is the lowest price a seller will accept. When you sell with a market order, you get the bid price. That price is always lower than the ask price, and the difference is the spread.

For large, heavily traded stocks like Apple or Microsoft, the spread is usually just a penny or two per share. For smaller stocks or stocks that don't trade often, the spread can be much wider — sometimes 10 cents, 50 cents, or more per share. This spread is the real cost of trading on Robinhood, and it's why selling a small position in a thinly traded stock can be more expensive than it looks.

Limit orders can help you avoid a wide spread, because you're naming your own price. But if you set the limit too high, your order may never fill.

Tax reporting when you sell

When you sell a stock in a regular taxable account (not an IRA or 401k), you owe tax on any profit. Robinhood tracks your cost basis — the price you paid for the shares — and calculates your gain or loss automatically. At the end of the year, Robinhood sends you a tax form (Form 1099-B) that reports all your sales.

The tax you owe depends on how long you held the stock. If you held it for more than one year, it's a long-term capital gain and usually taxed at a lower rate. If you held it for one year or less, it's a short-term capital gain and taxed as ordinary income. Robinhood's tax documents will tell you which sales were long-term and which were short-term, but calculating what you actually owe is between you and your tax preparer or the IRS.

If you sell at a loss, you can use that loss to offset gains from other sales, which can reduce your tax bill. Keep records of all your trades so you can report them accurately.

Common mistakes when selling

The most common mistake is using a market order on a stock that doesn't trade often, then being surprised by how far the price moved between when you decided to sell and when the order actually filled. If you're selling a small-cap or illiquid stock, use a limit order and give yourself a realistic price range.

Another mistake is forgetting that unsettled cash can't be withdrawn. People sell a stock expecting to move the money to their bank account immediately, then get frustrated when they can't. Remember: one business day to settle, then you can withdraw.

A third mistake is not thinking about taxes. Selling a stock you bought a month ago at a profit feels good, but that profit is taxable income. If you're in a high tax bracket, the tax bill can be significant. Plan ahead if you're selling a large position.

Frequently Asked Questions

Can I sell a fractional share on Robinhood?

Yes. Robinhood lets you buy and sell fractional shares, so if you own 10.5 shares of a stock, you can sell all 10.5 or just part of them. The process is the same — you enter the number of shares (including the decimal) and confirm the sale.

What if I place a limit order and the stock hits my price but doesn't fill?

This can happen if the stock price touches your limit but there aren't enough buyers at that exact price. The order may partially fill (selling some shares but not all) or not fill at all. If it doesn't fill by the end of the trading day, the order expires and you still own the shares. You can place a new limit order the next day.

Do I pay taxes on the sale right away or later?

You don't pay taxes when you sell — you pay taxes when you file your tax return, usually the following year. Robinhood reports the sale to the IRS on Form 1099-B, and you report it on your tax return. The IRS then calculates whether you owe tax based on your total income and gains for the year.

Can I cancel a sale after I place the order?

If you placed a limit order that hasn't filled yet, you can cancel it anytime before it fills. If you placed a market order, it fills almost instantly, so you usually can't cancel it. Once it's filled, the sale is done and you own the shares no longer.

What happens if I sell a stock and the price drops the next day?

Nothing happens to you — you already sold, so you don't own the stock anymore and you don't care what the price does. This is actually the goal when you sell: you exit the position and move on. If the price drops after you sell, that's a win for you.