The basic steps to buy a stock on Robinhood

To buy a stock on Robinhood, you open an account, fund it with money, search for the stock you want, enter how many shares you want to buy, and confirm the order. The whole process takes about five minutes once your account is set up and funded. Robinhood executes the trade during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays), so if you place an order after hours, it will fill when the market opens the next day.

You do not need to be a professional investor or have a large amount of money to start. Robinhood lets you buy fractional shares, meaning you can spend $10 or $100 on a stock that costs $500 per share — you will own a piece of that share rather than a whole one. This makes it possible to own stocks in expensive companies without saving thousands of dollars first.

Key Takeaways

  • You must create a Robinhood account, pass identity verification, and link a bank account or deposit money before you can buy any stock.
  • Robinhood charges no commission on stock trades, but the price you pay may be slightly higher or lower than the price shown on your screen due to how the platform executes orders.
  • Market orders execute immediately at the current price; limit orders let you set a maximum price you will pay and wait for the stock to drop to that level.
  • Stocks bought in a regular Robinhood account can be sold anytime, but profits on stocks held less than one year are taxed as ordinary income rather than capital gains.

Setting up your Robinhood account

Download the Robinhood app or go to robinhood.com and tap "Sign Up." You will need your full legal name, date of birth, email address, and a phone number. Robinhood will ask for your Social Security number to verify your identity and check for fraud. This verification usually takes a few minutes but can take up to a few days if Robinhood needs to confirm information with the IRS or other agencies.

After identity verification passes, you link a bank account. Robinhood accepts transfers from most U.S. banks. You can transfer money from your checking or savings account, and it typically arrives within one to three business days. Some banks process transfers faster than others. Once the money lands in your Robinhood account, it is available to buy stocks immediately.

Robinhood also offers a cash management feature that lets you earn interest on uninvested money sitting in your account, though the rate changes. Check the current rate in the app under Account settings.

How to search for and select a stock

Open the Robinhood app and tap the search icon at the bottom. Type the company name or its stock ticker symbol — for example, "Apple" or "AAPL." Robinhood will show you the stock price, a chart of how it has moved over the past day or year, and basic information like the company's market value and dividend (if it pays one). You can also see news articles about the company.

Tap on the stock to open its detail page. This is where you will see the current bid price (what buyers will pay) and ask price (what sellers want). The difference between these is called the spread. On popular stocks like Apple or Tesla, the spread is usually just a few cents. On less-traded stocks, the spread can be wider, meaning you might pay more to buy or receive less when you sell.

Do not feel pressured to buy immediately. You can save stocks to a watchlist by tapping the star icon, then come back to them later to research or watch their price move.

Placing your first stock order

Once you have decided which stock to buy, tap the "Buy" button on the stock detail page. Robinhood will ask how many shares or what dollar amount you want to spend. You can enter either — if you type "$50," Robinhood calculates how many shares that buys at the current price. If you type "2 shares," it shows you the cost.

Next, choose your order type. A market order buys the stock at the best available price right now. If you place a market order during market hours, it usually fills within seconds. A limit order lets you set a maximum price you will pay. If the stock is trading at $150 and you set a limit order for $145, Robinhood will wait until the price drops to $145 or lower, then buy automatically. Limit orders can take hours, days, or never fill if the price never reaches your target.

For your first purchase, a market order is simpler. Tap "Review Order," check that the number of shares and total cost are correct, then tap "Submit Order." Robinhood will confirm the trade and show you the price you paid and the exact time the order filled.

Understanding Robinhood's pricing and fees

Robinhood charges zero commission on stock trades. You do not pay a fee per trade like you might at a traditional brokerage. However, Robinhood makes money by routing your orders to market makers — large firms that buy and sell stocks constantly. These firms pay Robinhood a small amount for your order, and in return they may fill your order at a price slightly worse than the absolute best price available at that exact moment. This is called payment for order flow.

In practice, the difference is usually tiny — a few cents on a $100 stock purchase. But on large orders or volatile stocks, it can add up. If you want to avoid this, you can place a limit order instead of a market order, which gives you more control over the exact price you pay.

Robinhood also does not charge you to hold stocks or to transfer money in or out of your account. If you transfer money out, it takes one to three business days to reach your bank.

What happens after you buy

Once your order fills, the stock appears in your "Stocks" tab in the Robinhood app. You will see the number of shares you own, the price you paid per share, your total cost, and the current value. If the price goes up, the value shown will be green; if it goes down, it will be red. This is just the current market price — you have not made or lost money until you sell.

You can hold the stock as long as you want. If the company pays a dividend (a cash payment to shareholders), Robinhood deposits it into your account automatically. You can reinvest dividends by buying more shares, or let the cash sit in your account.

When you want to sell, tap the stock, tap "Sell," enter how many shares to sell, choose market or limit order, and confirm. The cash from the sale lands in your Robinhood account immediately and can be withdrawn to your bank or used to buy other stocks.

Tax considerations and holding periods

The IRS taxes stock profits differently depending on how long you hold the stock. If you sell a stock you have owned for less than one year, the profit is taxed as ordinary income at your regular tax rate. If you hold it for one year or longer, the profit is taxed as a long-term capital gain, which has lower tax rates for most people.

Robinhood does not automatically withhold taxes or file tax forms for you. At the end of each year, Robinhood sends you a Form 1099-B showing all your trades. You report this information on your tax return. If you are unsure how to report stock sales, speak with a tax professional or use tax software that walks you through the process.

Keep track of when you bought each stock and at what price. This information is available in your Robinhood account under "History," but having your own records makes tax time easier.

Frequently Asked Questions

Can I buy stocks before the market opens or after it closes?

You can place an order anytime, but it will not fill until the market is open (9:30 a.m. to 4 p.m. Eastern, Monday through Friday). If you place an order at 6 p.m., it will fill the next morning when the market opens. Robinhood does not offer after-hours trading like some other brokerages do.

What is the minimum amount of money I need to start?

Robinhood has no account minimum. You can open an account with $1 and buy fractional shares. However, if you want to day trade (buy and sell the same stock on the same day), you must have at least $25,000 in your account. This is a federal rule, not a Robinhood rule.

What if I change my mind right after buying?

Once an order fills, you own the stock. You cannot cancel a filled order, but you can immediately sell the stock by tapping "Sell" on the stock detail page. If you sell right away, you will likely get back almost exactly what you paid, minus a few cents due to the bid-ask spread. If the price moved against you in those few seconds, you will lose a small amount.

Do I need to have a certain amount of money to buy a specific stock?

No. Because Robinhood offers fractional shares, you can buy any stock with any amount of money. If a stock costs $500 per share and you have $50, you will own 0.1 shares. You do not need to save up to buy a whole share.

Can I set up automatic purchases?

Robinhood does not have an automatic investment feature built in. You must manually place each order. Some other brokerages offer automatic recurring purchases, but Robinhood does not, so you will need to decide when to buy each time.