With the recent open of the US stock market and the resulting trading rush, new users are flocking to the Robinhood app on iOS and Android. Many immediately encounter the Robinhood “Not enough buying power” message, though. For anyone confused by the notification, here’s a buying power explainer and how to stop the Robinhood pop-up. Crypto, stocks, and options will all become purchasable with a little know-how.
Talking about the ‘Buying Power’ in the Robinhood platform, it’s the amount of money that you can use to purchase stocks, options, or cryptocurrencies on the Robinhood app. All the trading in stocks and options can be done via your brokerage account with Robinhood Financial. Whereas cryptocurrency trading can be done via a separate account with Robinhood Crypto. Although users can still see all of their buying power in one place in the Robinhood app or web version, that’s not the case every time.
When you purchase cryptos on Robinhood, it will need to put some additional amount on the displayed stock rate that you wish to purchase. This amount is normally 5 percent as additional. Let’s understand it with an example.
Suppose you wish to buy a stock worth $100. Then you will need buying power of a minimum of $105. If you have only $100 then you will get error “Robinhood Not Enough Buying Power”. This extra amount helps you in ensuring your purchase if market buffers.
Your order will be executed successfully in the scenario of even a-bit movement in the market. Hence, if you wish to purchase the stock worth 100 dollars by depositing only 100$, you get an error of “Not enough buying power.
Fix: Robinhood Not Enough Buying Power Error
First, you must have sufficient balance to complete your crypto or stock purchase. In case you do not have enough buying power, It can be fixed in several ways. Now, if you want to reach enough buying power on Robinhood then you have to follow some of the steps mentioned below:
- A user must hold at least +5% of the total value which has been invested. If GameStop ($GME) is standing at $325 per share (Jan 31, 2021) then the user should have to meet the required buying power per share.
- The user must have to keep at least $210 in the account.
- Similarly, the user must have to meet the requirements for buying cryptocurrencies via the Robinhood Crypto (at least +5% of the listed price) in cash in the account.
An amount that you lend from Robinhood to buy cryptos or stock gives you almost equal to the credit line for the share market. You can obtain up to 2 times the buying power. Hence, you become able to invest more. For any further queries related to it, you can visit the Robinhood help center.
Robinhood buying power takes time to update after the sale. Your trade settlement time will be the trade date in addition to 2 more trading days (T+2). After two days, your funds are credited into your buying power & appear as cash that can be withdrawn.
In addition to making a deposit, you can also fix the not enough buying power error by liquidating some of your positions. Proceeds from a stock sale will boost your Robinhood buying power immediately. Even after making a deposit or selling a security, technical issues with the broker can also prevent buying power from updating immediately. This could impact your ability to complete a purchase order.
Robinhood Crypto buying power
The buying power on Robinhood Crypto, the division of the broker that handles cryptocurrency trades, works a little differently from stocks. First, you can’t borrow funds from the broker to boost your crypto buying power. Second, if you want to use proceeds from stock sales to purchase crypto, you have to wait three days for the funds to settle in the account. However, proceeds from crypto sales and a limited cash deposit are available immediately to use for crypto purchases.
It usually takes two to three days from the day of trading to update your buying power on Robinhood.
Bottom Line
People recently rushed to download Robinhood in an effort to purchase soaring GameStop stock, eventually causing the trading application to crash. In response, $GME purchases received a temporary ban before returning in a limited capacity. The decision has drawn a lot of criticism, along with allegations of the app auto-selling stock. In response, GameStop investors have filed a lawsuit against Robinhood.
