The basic steps to place a trade on Robinhood

To buy or sell a stock on Robinhood, you open the app or website, search for the company by name or ticker symbol, enter how many shares you want, and confirm the order. The trade executes immediately during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays), or queues for the next market open if you trade after hours. Your cash balance decreases when you buy and increases when you sell.

You do not need to fund your account before you place your first trade — Robinhood lets you trade with unsettled cash (money from a recent deposit or sale that has not yet cleared from your bank). However, if you make more than three day trades in five business days, the account is flagged as a pattern day trader and you must keep at least $25,000 in the account to continue trading that way.

Key Takeaways

  • Trades execute instantly during market hours (9:30 a.m. to 4 p.m. Eastern weekdays) but queue for the next open if you trade after hours or on weekends.
  • You can trade with unsettled cash from recent deposits, but making more than three day trades in five business days triggers a $25,000 minimum balance requirement.
  • Robinhood charges no commission per trade, but you pay the bid-ask spread (the difference between what buyers and sellers will pay) when you buy or sell.
  • Limit orders let you set a price you are willing to pay or accept; market orders execute at whatever price is available right now.
  • Fractional shares let you buy a portion of a stock instead of a whole share, so you can invest smaller amounts.

Market hours and when your trade actually executes

The stock market is open 9:30 a.m. to 4 p.m. Eastern time, Monday through Friday. If you place a trade during those hours, it executes within seconds. If you place a trade after 4 p.m., before 9:30 a.m., or on a weekend, it enters a queue and executes at the next market open — usually the next morning at 9:30 a.m.

Robinhood also offers extended-hours trading (4 p.m. to 8 p.m. Eastern and 7 a.m. to 9:30 a.m. Eastern), but volume is much lower and prices can swing more. Most traders avoid extended hours because the bid-ask spread widens and your order may not fill at all.

If the market is closed for a holiday, your order queues until the next trading day. You can cancel a queued order at any time before the market opens.

Market orders versus limit orders

A market order buys or sells immediately at whatever price is available right now. If you place a market order to buy 10 shares of Apple, Robinhood finds sellers willing to sell at that moment and fills your order at their asking price — which might be $150.25 per share, or $150.30, depending on who is selling. Market orders are fast but the price you pay is not may provide.

A limit order lets you set the maximum price you will pay (for a buy) or the minimum price you will accept (for a sell). If you place a limit order to buy Apple at $150, your order sits in the queue until someone is willing to sell at $150 or lower. If the price never drops to $150, your order never fills. Limit orders give you price control but no may provide the trade will happen.

For most traders, market orders are simpler for small purchases. Limit orders are useful if you are buying or selling a large number of shares and want to avoid moving the price against you, or if you have a specific price in mind and are willing to wait.

Understanding the bid-ask spread and costs

Robinhood charges zero commission per trade, but you still pay 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 buy, you pay the ask. When you sell, you receive the bid. The difference between them is the spread, and it goes to market makers, not to Robinhood.

For popular stocks like Apple or Tesla, the spread is usually just a penny or two per share. For less-traded stocks or during low-volume hours, the spread can be 10 cents, 50 cents, or more per share. On a 100-share order, a wide spread costs real money. This is why limit orders matter: they let you avoid paying the full ask price if you are willing to wait for a better price.

Robinhood also offers Robinhood Gold, a paid subscription that includes margin (borrowing to trade) and extended-hours access. Most new traders do not need it.

Fractional shares and how they work

Robinhood lets you buy a fraction of a share instead of a whole share. If a stock costs $500 per share and you have $100, you can buy 0.2 shares instead of waiting to save $500. Fractional shares trade at the same bid-ask spread as whole shares and execute during the same market hours.

Fractional shares are useful if you want to invest a fixed dollar amount (say, $50 per week) or if you want to own a piece of an expensive stock without saving for a full share. However, some brokers do not accept fractional shares, so if you ever transfer your account elsewhere, fractional shares may be rounded or sold.

Settling cash and the pattern day trader rule

When you deposit money into Robinhood, it takes one to three business days to settle (clear from your bank). During that time, you can still trade with the unsettled cash, but if you sell before the deposit settles, you may trigger a good-faith violation. Robinhood allows two good-faith violations in 12 months; a third violation locks your account for 90 days.

The pattern day trader rule is a federal rule, not a Robinhood rule. If you make more than three day trades (buy and sell the same security on the same day) in five business days, your account is flagged as a pattern day trader. Once flagged, you must maintain at least $25,000 in the account to continue day trading. If your balance drops below $25,000, you cannot place any day trades until it rises again.

This rule applies to all brokers, not just Robinhood. It is designed to protect new traders from losing money quickly. If you plan to day trade, budget for the $25,000 minimum.

Placing your first trade: step by step

Open the Robinhood app or go to robinhood.com. Tap or click the search icon and type the company name or ticker symbol (for example, "Apple" or "AAPL"). Select the stock from the results. You see the current price, a chart, and a green "Buy" button.

Tap "Buy". A screen appears asking how many shares or what dollar amount you want to buy. Enter the number (for example, 5 shares or $100). Below that, you see the order type: "Market" is selected by default. If you want to set a price limit, tap "Market" and select "Limit", then enter your limit price. Tap "Review Order" to see a summary, then tap "Confirm and Buy" to place the trade.

Your order executes within seconds if the market is open. You see a confirmation screen with the execution price, the total cost, and the time. The shares appear in your portfolio immediately. To sell, find the stock in your portfolio, tap it, tap the red "Sell" button, and follow the same steps.

Frequently Asked Questions

Can I trade stocks before the market opens?

Yes, Robinhood offers extended-hours trading from 7 a.m. to 9:30 a.m. Eastern. However, volume is low, spreads are wide, and your order may not fill. Most traders avoid pre-market trading unless they have a specific reason.

What happens if I place a trade after the market closes?

Your order queues and executes at the next market open, usually 9:30 a.m. the next trading day. You can cancel the order anytime before the market opens. If you want to trade after hours, use extended-hours trading instead.

Do I lose money if a stock price drops after I buy?

Your account value drops, but you do not lose money unless you sell. If you hold the stock, you can wait for the price to recover. However, if you sell at a lower price than you paid, you realize a loss and cannot undo it.

What is the minimum amount I need to start trading?

Robinhood has no account minimum. You can open an account with $1 and buy fractional shares. However, if you plan to day trade, you must keep at least $25,000 in the account once you are flagged as a pattern day trader.

Can I set up automatic trades or recurring investments?

Robinhood does not offer automatic recurring investments. You must place each trade manually. However, you can set price alerts so you are notified when a stock hits a certain price, then place a trade yourself.