Can you sell ETFs and stocks short on Robinhood? Fees and requirements. Does Robinhood offer inverse ETFs and buying put options?

Short Selling

Whether you are in a bear market or you just want to take advantage of falling stock prices, short selling can be an attractive idea. If you trade stocks or ETFs at Robinhood, you might be wondering if you can open short positions with a margin account. Keep reading to learn how you can profit from lower prices at Robinhood, as well as a good alternative for selling short.

Does Robinhood Offer Short Selling?

Despite the rise in popularity of short selling, Robinhood does not allow its traders to sell stocks short. The broker includes many other services for its margin accounts, but short selling is excluded due to the volatile nature of the strategy.

If you do not want to change brokers, there are some alternatives to selling stocks short, like buying inverse ETFs, buying put options, and selling calls. However, the same alternatives can be used at a broker that allows short selling as well. Being able to choose between selling short or using an alternative method of being bearish can give you more control over your portfolio.

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Webull as Alternative

Since you can’t short stocks at Robinhood, you will need a good alternative. We like Webull as a good option for shorting.

The mobile-focused broker has many of the same features as Robinhood, and you can short securities.

Selling Stocks Short at Webull

If a stock is shortable, Webull will indicate that with an icon. With the stock screen open, look near the price (on mobile), just above the chart, for a blue downward-facing arrow. If you see that icon, all you need to do to set up a short position is to use the trade ticket and select ‘Sell’ instead of ‘Buy’.

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Setting up the sale

From any of the available trading platforms, you can navigate to the trade ticket for any security that you would like to short. On the desktop and browser trading platforms, you can use the trade ticket located next to the chart. Alternatively, you can bring up the trade ticket by right-clicking the chart and selecting ‘New Order’.

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When using the chart to get to the trade ticket, it is good to keep in mind that the limit price will start out at whichever price you were at when you clicked on the chart.

When the trade ticket opens, you will then make sure that the order is to ‘Sell’ to open. Assuming that you have the required capital in your account, the process of opening a position by selling is the same as for buying.

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Buying to cover a position

When you want to close your short position, all that is required is to buy the shares back. To do that, you will find the open position, opt to close the position out, and buy to cover the shares.

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Account Requirements

As mentioned, there are a few account requirements that you should meet if you want to sell stocks short fat Webull (or any other broker for that matter). First, your account should hold at least $2,000. Your account also needs to have access to margin.

Alternative Methods to Go Short on Robinhood

As mentioned, there are some alternatives to shorting stocks that you can use at Robinhood. Since Robinhood provides access to most exchange-listed stocks and ETFs, you can create bearish options strategies on nearly every security. You can also buy inverse ETFs. Here are some of your options:

Inverse ETF Trading at Robinhood

Inverse ETFs are a great way to play the opposite side of the market. Inverse ETFs track the inverse of whatever price they follow. If you believe that a basket of stocks, like the Nasdaq, S&P 500, Russell, or Dow is going to go down in price, buying shares in an inverse ETF will have the same effect as shorting.

Some popular inverse ETFs available at Robinhood are; ProShares Short S&P 500 (SH), ProShares Short QQQ (PSQ), ProShares Short DOW30 (DOG), and ProShares Short Russell2000 (RWM)

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Creating Bearish Options Strategies

To get more granular with your stock shorting at Robinhood, you can create bearish options strategies for specific stocks or ETFs. The most popular strategies for a bearish bias are covered calls, call credit spreads, and buying put options. Here’s how to build bearish options positions at Robinhood.

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Updated on 3/16/2022.