Margin investing in Robinhood

Aug 14, 2021 14 Comments

Seems like they give a margin almost equal to your portfolio value at only 2.5% per year. Sounds good to be true.
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TOP 14 Comments
  • Donโ€™t maximize it. All it takes is a few constructive red days for you to
    Get margin called.

    Although if youโ€™re buying index funds I wouldnโ€™t mind leveraging up to 35%
    Aug 14, 2021 4
  • Is 45% margin risky? The maintenance requirement is 25%. I have used 170k margin and my asset (without margin) is 360k. Including the margin the asset is 530k. Do you think itโ€™s risky?
    Aug 14, 2021 0
  • Medtronic / Manufacturing
    tuckfrum

    Go to company page Medtronic Manufacturing

    tuckfrum
    I have my play account on Robinhood and have been using margin on it since June. I would say its a high risk high reward game. I was leveraged like $9k on cryptos and when they took a dump last month i was pretty close to get margin called. If you arent a huge risk taker, Just dont buy risky stocks or cryptos. If you are buying index funds or FAANGS, just go ahead.
    Aug 14, 2021 0
  • M1 finance offers 2% for their plus membership (it's easy to offset the cost)
    Aug 14, 2021 0
  • Google
    โˆ†๐Ÿง 

    Go to company page Google

    โˆ†๐Ÿง 
    Ignoring unique tax situations or social subsidies, borrowing money is always -EV (risk increases more than reward). It's essentially gambling.

    If you're okay with that, go for it. Personally, levering up to buy safe index funds seems to defeat the purpose. I'd rather just rebalance to riskier assets -- it's more fun.
    Aug 14, 2021 0