Investing Simple Logo
Menu
Get 1 Free Stock Worth Up To $200 From Robinhood!
Sign up with Robinhood, deposit any amount and get 1 Free Stock. It takes less than 3 minutes to sign up and claim your Free Stock Bonus.
Webull free stock promotion
Get Up To 5 Free Stocks From Webull
Open a new Webull brokerage account today and deposit any amount of money to receive 5 free stocks. Webull offers commission free stock, ETF, option and crypto trading.
Written by Sam Pennington on March 12, 2023
Category: 
FTC Disclosure

Do You Actually Own Shares On Robinhood?

There has been some confusion and misinformation circulating on social media about whether investors who use Robinhood actually own the shares they purchase through the popular trading app.

Some people have claimed that Robinhood does not give you actual ownership of your shares, and that your investments are simply held as collateral by Robinhood.

So, do you actually own your shares on Robinhood? The short answer is yes, you absolutely do.

When Do You Own Your Shares?

As soon as your order is executed and your shares are purchased, you own them outright.

This is not unique to Robinhood; it is standard practice across all brokerages. When you buy a stock, you own a piece of the underlying company, and your shares are registered with the Depository Trust & Clearing Corporation (DTCC) and held in your brokerage account. The process of settling your trade, which takes two days, is the same at every brokerage, including Fidelity, TD Ameritrade, and Charles Schwab.

It’s important to note that Robinhood is not engaging in contract for difference (CFD) trading, which is a type of forex trading. Robinhood Securities is a clearing broker dealer, not a market maker, and the company doesn’t sell shares short.

Conclusion

The confusion surrounding Robinhood’s handling of shares may stem from the company’s past issues with its cash management product, which was marketed as a savings account but did not have Federal Deposit Insurance Corporation (FDIC) insurance. However, Robinhood has since removed the product and clarified its policies, and the company is now working on obtaining FDIC insurance for its cash management accounts.

In short, there is no reason to believe that Robinhood is holding your investments as collateral or that you do not actually own the shares you purchase through the platform. You own the shares outright, just like you would at any other brokerage.

This article was generated using automation technology, and thoroughly edited and fact-checked by an editor on our editorial staff.

Article written by Sam Pennington
Sam is a personal finance writer. While in college, he dedicated his spare time to learning about personal finance, investing, and real estate. Sam currently works as a business analyst for one of the top food manufacturers in the world.

Read more

Power Your Investing

Choosing the right product and service is essential for your investing. Here are some of the tools and services to help your portfolio grow.
Robinhood
Robinhood provides an easy-to-use free trading platform for beginner investors. Robinhood has $0 account minimums. Get a free stock when you open an account below.
Try Robinhood
M1 Finance
M1 Finance offers a free investing platform where users can build portfolios of stocks and ETFs. Users can also choose from a variety of pre-built portfolios offered for free.
Try M1 Finance
Fundrise
Passively invest in private real estate deals with as little as $10. Fundrise allows you to own residential and commercial real estate across the U.S. starting at a 1% annual fee.
Try Fundrise
Copyright © 2018 – 2023 Investing Simple LLC. All Rights Reserved.
Investing Simple is a financial publisher that does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that investment markets have inherent risks, and past performance does not assure future results. Investing Simple has advertising relationships with some of the offers listed on this website. The information on Investing Simple could be different from what you find when visiting a third-party website. All products are presented without warranty. For more information, please read our full disclaimer.
Website managed by Stallion Cognitive™
magnifiermenuchevron-downcross-circlechevron-down-circle

Get 1 Free Stock Worth Up To $200 From Robinhood!

Don't Miss This Opportunity!

Investing Simple readers can claim a free stock from Robinhood worth up to $200 when they open a brokerage account and deposit any amount.

For US Residents only. Investing Simple is affiliated with Robinhood, and we may earn a commission when you sign up for Robinhood.

18749
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram