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Home Investing in Stocks How Do I Sell My Stock on Robinhood?

How Do I Sell My Stock on Robinhood?

by Barbara

Selling stocks on Robinhood is a straightforward process. Robinhood, as one of the most popular platforms for buying and selling stocks, has made it simple for beginners and experienced investors alike to trade stocks without having to worry about fees. However, selling your shares is not just about tapping a button; it involves understanding the timing, market conditions, and how selling might impact your overall investment strategy. This article will guide you through the steps of selling your stock on Robinhood, the different types of sales, and what to consider before making that decision.

Getting Started with Robinhood

If you’ve already purchased stocks through Robinhood, the first step in selling your stock is logging into the app. Robinhood’s interface is designed to be user-friendly, and once you’re logged in, you’ll be able to see your portfolio, the stocks you hold, and their current market value.

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To begin, open the app on your phone or log in through the desktop version. Your homepage will display your current portfolio balance, recent transactions, and the stock price movements for the day. You’ll also see the list of stocks you currently own under the “Portfolio” section. From here, you can start the process of selling.

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How to Sell Stock on Robinhood

1. Select the Stock You Want to Sell

The first step in selling your stock is selecting the specific stock you wish to sell. Scroll through your portfolio and tap on the stock you want to sell. This will take you to the stock’s detail page, where you can view various information about the company, including its current price, performance over time, and your current holdings in that stock.

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It’s important to review this information before proceeding to sell, especially if you’re considering whether it’s the right time to sell based on the stock’s performance. You’ll see how much of the stock you own and the gains or losses you’ve experienced since purchasing it.

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2. Tap “Trade”

Once you’re on the stock’s detail page, you’ll see a button labeled “Trade” at the bottom of the screen. Tap this button to proceed. After tapping “Trade,” you’ll be given two options: “Buy” and “Sell.” Since you’re looking to sell your stock, you’ll select the “Sell” option.

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3. Choose the Number of Shares to Sell

After selecting “Sell,” Robinhood will prompt you to specify the number of shares you want to sell. If you want to sell all your shares in that stock, you can choose the maximum amount by entering the total number of shares you own. Alternatively, you can enter a smaller number if you only wish to sell part of your position.

Make sure to double-check the number of shares you’ve entered to ensure accuracy. Robinhood will display the total value of the shares you’re about to sell based on the current market price.

4. Select the Order Type

When selling stocks on Robinhood, you can choose from a few different order types. These options give you control over how and when your stock is sold. Understanding these types is crucial to executing your sale in a way that meets your financial goals. The most common order types are:

Market Order: This is the simplest type of order. When you place a market order, Robinhood will sell your stock immediately at the best available current market price. Keep in mind that the price can fluctuate slightly between the time you place the order and the time it is executed, especially in a volatile market.

Limit Order: A limit order allows you to specify the price at which you want to sell your stock. Robinhood will only sell your shares if the stock reaches the price you’ve set. This is useful if you believe the stock will rise to a specific value and you want to lock in that price.

Stop Order: A stop order is used to sell your stock once it reaches a certain price, known as the stop price. Once the stock hits the stop price, your order becomes a market order and will sell at the best available price. This is often used to limit potential losses if the stock’s price is dropping.

Stop-Limit Order: This is a combination of a stop order and a limit order. You set a stop price and a limit price, and your stock will only be sold if it reaches the stop price, but not lower than the limit price you’ve set.

Choose the order type that fits your strategy. If you’re looking for immediate liquidity, a market order is your best option. If you’re waiting for the stock to hit a specific price, a limit or stop order may be more suitable.

5. Review and Confirm Your Order

After selecting the number of shares and the type of order, you’ll be prompted to review your trade. Robinhood will display all the details of your sale, including the number of shares, the current price, and any order-specific conditions you’ve chosen (such as the limit price).

Take your time to ensure everything is correct before proceeding. When you’re ready, tap “Submit” or “Confirm” to finalize the sale. Robinhood will then execute your order based on the parameters you’ve set.

What Happens After Selling Your Stock?

Settlement Period

After you sell your stock, the proceeds won’t immediately be available for withdrawal or reinvestment. This is because of the T+2 settlement rule, which means the sale must be settled in two business days. During this period, the money is still being processed by the market, and once it clears, it will be available in your Robinhood account balance.

Once the settlement is complete, you can choose to withdraw the money to your bank account or use it to invest in other stocks or assets.

Transferring Funds to Your Bank Account

If you’ve sold stock to withdraw funds, the next step is to transfer your balance to your linked bank account. Go to the main screen of Robinhood, where you can view your available balance. From there, tap on “Transfer” and select “Transfer to Your Bank.” You’ll be able to enter the amount you wish to transfer and confirm the transaction.

Robinhood typically allows standard transfers that take a few business days, but you can also use the instant transfer option if you need the money immediately.

see also: Which Trading Is Good for Beginners?

Things to Consider Before Selling Your Stock

Tax Implications

One of the most important things to consider before selling your stock is the potential tax implications. When you sell stock at a profit, you may be subject to capital gains tax. The rate at which your gains are taxed depends on how long you held the stock and your overall income.

Short-Term Capital Gains: If you sell your stock within a year of purchasing it, the profit will be taxed as ordinary income, which could mean a higher tax rate.

Long-Term Capital Gains: If you held the stock for more than a year, your profits might be taxed at a lower rate, depending on your income bracket.

You should also consider any losses you’ve incurred when selling stocks. These losses can offset gains and reduce your tax liability.

Market Conditions

Timing the market is difficult, but it’s important to consider the overall market conditions before selling your stock. If the market is in a downturn and you’re selling in a panic, you could be locking in losses. On the other hand, if your stock has reached a peak and you believe it’s time to take profits, selling could be a smart move.

Make sure to evaluate the stock’s recent performance, any news or developments that could affect its price, and your long-term financial goals before making a decision.

Diversification

If you’re selling stock to rebalance your portfolio, it’s essential to think about diversification. Diversifying your portfolio helps reduce risk by spreading your investments across different asset classes, industries, or sectors. If selling one stock means you’re becoming too concentrated in a particular area, consider reinvesting the proceeds into a different type of investment.

Conclusion

Selling stock on Robinhood is a simple and user-friendly process. By following the steps outlined in this article, you can quickly sell your shares, whether you’re looking for immediate liquidity or waiting for a specific price. Always consider the type of sale that fits your strategy, review market conditions, and be aware of potential tax implications before finalizing your transaction.

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Once the sale is complete and the funds have settled, you can decide whether to withdraw your money or reinvest it in other opportunities. With careful planning, selling stocks on Robinhood can be an effective way to manage your portfolio and achieve your financial goals.

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