Selling Stocks On Robinhood: A Step-by-Step Guide

Oct 23, 2025 by Jhon Lennon 50 views

So, you're thinking about selling some stocks on Robinhood? Whether you're taking profits, cutting losses, or rebalancing your portfolio, it's a pretty straightforward process once you get the hang of it. This guide will walk you through everything you need to know to sell your stocks on the Robinhood app with ease. Let's dive in!

Understanding the Basics of Selling Stocks on Robinhood

Before we get into the nitty-gritty, let's cover some basics. Selling stocks on any platform involves a few key concepts. First, you need to understand market orders versus limit orders. A market order tells Robinhood to sell your stock at the current market price ASAP. This is great if you need to sell quickly, but you might not get the exact price you were hoping for. On the other hand, a limit order lets you set a specific price at which you're willing to sell. If the stock hits that price, Robinhood will execute the order. If it doesn't, the order remains open until it expires or you cancel it. Understanding these order types is crucial for controlling your trades.

Another thing to keep in mind is the settlement period. When you sell a stock, the cash isn't immediately available in your account. It usually takes about two business days for the transaction to settle. This is known as T+2 settlement. So, if you sell on Monday, the funds will typically be available on Wednesday. This delay is important to consider if you're planning to use the funds from the sale to make another investment right away. Also, be aware of any potential tax implications. Selling stocks can trigger capital gains taxes, depending on how long you held the stock and your overall income. It's always a good idea to consult with a tax professional to understand your specific situation. Finally, remember that the stock market can be volatile. Prices can fluctuate rapidly, and there's always a risk that you might not get the price you were expecting. It's important to stay informed and make rational decisions based on your investment goals and risk tolerance. By understanding these basics, you'll be well-prepared to navigate the process of selling stocks on Robinhood with confidence.

Step-by-Step Guide to Selling Your Stocks

Alright, let's get down to the actual steps. Selling stocks on Robinhood is designed to be user-friendly, but here’s a detailed walkthrough:

Open the Robinhood App: Seems obvious, right? But start by making sure you’re logged into your Robinhood account on your mobile device. Security first, guys! Double-check you’re on the official app to avoid any phishing scams.
Find the Stock You Want to Sell: Use the search icon (usually a magnifying glass) at the bottom of the screen to find the specific stock you want to sell. You can type in the company name or the stock ticker symbol. Once you find it, tap on the stock to go to its detail page.
Tap the “Trade” Button: On the stock detail page, you’ll see a “Trade” button. Tap on that. This will bring up a menu with options to buy or sell. Obviously, we're going for the latter.
Select “Sell”: From the trade menu, choose the “Sell” option. This will take you to the order screen where you can specify the details of your sale. This is where you tell Robinhood exactly what you want to do with your shares.
Choose Your Order Type: Here, you’ll decide between a market order and a limit order (as discussed earlier). If you want to sell the stock immediately at the best available price, choose “Market Order.” If you want to set a specific price at which you’re willing to sell, choose “Limit Order.”
Enter the Number of Shares: Now, enter the number of shares you want to sell. You can either type in the number directly or use the percentage buttons to sell a portion of your holdings (e.g., 25%, 50%, 75%, or all of your shares). Make sure you double-check the number to avoid any accidental sales!
Review Your Order: Before you finalize the sale, Robinhood will show you a review screen with all the details of your order. This is your last chance to make sure everything is correct. Pay close attention to the order type, the number of shares, and the estimated price (especially if you’re using a market order).
Swipe Up to Submit: If everything looks good, swipe up from the bottom of the screen to submit your order. This will send your order to Robinhood for execution. Keep an eye on the order status to see when it’s filled.
Check Your Order Status: After you submit your order, you can check its status in the “History” section of the app. This will show you whether the order has been filled, is still pending, or has been canceled. Once the order is filled, the cash from the sale will be credited to your Robinhood account (minus any fees, if applicable) after the settlement period (T+2).

By following these steps, you can confidently sell your stocks on the Robinhood app and manage your investments effectively.

Market Order vs. Limit Order: Which Should You Choose?

Choosing between a market order and a limit order is a critical decision when selling stocks, and the best choice depends on your specific goals and the current market conditions. Let's break down the pros and cons of each to help you make an informed decision.

Market Order

A market order is an instruction to sell your stock immediately at the best available price in the current market. This type of order prioritizes speed and guarantees that your order will be executed quickly. However, the trade-off is that you might not get the exact price you were hoping for, especially in volatile market conditions. The price can fluctuate rapidly between the time you place the order and the time it's executed.

Pros of Market Orders:

Speed: Market orders are executed almost instantly, making them ideal for situations where you need to sell quickly.
Certainty of Execution: Because the order is filled at the best available price, there's a high probability that your order will be executed, regardless of market conditions.

Cons of Market Orders:

Price Uncertainty: You might not get the price you were expecting, especially if the market is volatile or if the stock has a wide bid-ask spread.
Potential for Slippage: Slippage occurs when the price you get is significantly different from the price you saw when you placed the order. This is more likely to happen with market orders during periods of high volatility.

Limit Order

A limit order, on the other hand, allows you to specify the minimum price at which you're willing to sell your stock. Your order will only be executed if the market price reaches or exceeds your specified limit price. This gives you more control over the price you receive, but there's no guarantee that your order will be filled. If the market price never reaches your limit price, your order will remain open until it expires or you cancel it.

Pros of Limit Orders:

Price Control: You have the ability to set the minimum price you're willing to accept for your stock, protecting you from unfavorable price fluctuations.
Reduced Slippage: By setting a limit price, you can avoid the risk of slippage and ensure that you get the price you want.

Cons of Limit Orders:

Uncertainty of Execution: There's no guarantee that your order will be filled, especially if the market price never reaches your limit price.
Potential for Missed Opportunities: If the market price rises quickly and never retraces to your limit price, you could miss out on a profitable selling opportunity.

Which Order Type Should You Choose?

So, which order type is right for you? Here are some general guidelines:

Choose a Market Order if: You need to sell your stock quickly and are willing to accept some price uncertainty. This is often the best choice when you're trying to limit losses or take advantage of a rapidly changing market.
Choose a Limit Order if: You have a specific price target in mind and are willing to wait for the market to reach that price. This is often the best choice when you're trying to maximize profits or avoid selling at an unfavorable price.

Ultimately, the decision of whether to use a market order or a limit order depends on your individual circumstances, risk tolerance, and investment goals. Consider your priorities and weigh the pros and cons of each order type before making a decision. Also, don't be afraid to experiment with both types of orders to see which one works best for you in different situations. Over time, you'll develop a better understanding of how the market works and how to use different order types to your advantage.

Key Considerations Before Selling

Before you hit that sell button, hold up! There are a few key things you should consider to make sure you're making the right move.

Tax Implications

First and foremost, think about taxes. Selling stocks can trigger capital gains taxes, and the amount you owe depends on how long you held the stock and your tax bracket. If you held the stock for less than a year, it's considered a short-term capital gain and is taxed at your ordinary income tax rate. If you held it for longer than a year, it's considered a long-term capital gain and is taxed at a lower rate (0%, 15%, or 20%, depending on your income). Keep meticulous records of your stock purchases and sales, including the dates and prices, to accurately calculate your capital gains or losses. Consider consulting with a tax professional to understand the specific tax implications of your stock sales and to explore strategies for minimizing your tax liability. Tax-loss harvesting, for example, involves selling losing investments to offset capital gains and reduce your overall tax bill.

Investment Strategy

Next, consider your overall investment strategy. Are you selling because the stock no longer fits your long-term goals? Or are you just reacting to short-term market fluctuations? It's important to have a clear rationale for selling and to make sure it aligns with your broader investment plan. Avoid making impulsive decisions based on emotions or market hype. Instead, stick to your strategy and make rational decisions based on thorough research and analysis. Rebalancing your portfolio is another important aspect of investment strategy. Periodically review your asset allocation and make adjustments to maintain your desired risk profile. Selling stocks that have outperformed your target allocation can help you reduce risk and diversify your portfolio.

Fees and Commissions

While Robinhood is known for commission-free trading, it's always a good idea to double-check for any potential fees or charges associated with selling your stocks. Some brokers may charge fees for certain types of orders or for transferring funds out of your account. Familiarize yourself with Robinhood's fee schedule and be aware of any costs that could impact your net proceeds from the sale. Also, keep in mind that while Robinhood doesn't charge commissions, it does generate revenue through other means, such as payment for order flow. This practice involves routing your orders to market makers who pay Robinhood for the opportunity to execute your trades. While this doesn't directly cost you anything, it's important to be aware of how Robinhood makes money and how it could potentially affect the execution price of your orders.

Market Conditions

Finally, pay attention to the overall market conditions. Is the market trending up or down? Are there any major news events that could impact the stock price? While you can't predict the future, being aware of the current market environment can help you make more informed decisions about when and how to sell your stocks. Volatility can create both opportunities and risks, so it's important to stay calm and avoid making impulsive decisions based on fear or greed. Consider using technical analysis tools, such as charts and indicators, to identify potential support and resistance levels and to gauge the momentum of the stock. Also, stay informed about company-specific news and industry trends that could affect the stock's performance. By staying informed and paying attention to market conditions, you can increase your chances of selling your stocks at a favorable price.

By considering these key factors before selling your stocks, you can minimize risks and maximize your returns. Selling stocks is a significant decision, so take your time, do your research, and make sure you're making the right choice for your financial future.

Common Mistakes to Avoid When Selling Stocks on Robinhood

Even with a user-friendly platform like Robinhood, it's easy to make mistakes when selling stocks. Here are some common pitfalls to avoid:

Not Understanding Order Types: As we discussed earlier, market orders and limit orders serve different purposes. Using the wrong order type can lead to unexpected results. For example, using a market order in a volatile market could result in selling your stock at a much lower price than you anticipated. Always double-check your order type before submitting it.
Entering the Wrong Number of Shares: This might seem obvious, but it's easy to make a typo when entering the number of shares you want to sell. Double-check the number carefully to avoid accidentally selling more or fewer shares than you intended. Consider using the percentage buttons (e.g., 25%, 50%, 75%) to sell a portion of your holdings if you're unsure about the exact number of shares.
Ignoring Tax Implications: As mentioned earlier, selling stocks can trigger capital gains taxes. Ignoring these tax implications can lead to unpleasant surprises when you file your tax return. Keep track of your stock purchases and sales and consult with a tax professional to understand the tax consequences of your trades.
Chasing Hot Stocks: It's tempting to jump on the bandwagon and buy or sell stocks based on hype or short-term trends. However, this can be a risky strategy that often leads to losses. Stick to your long-term investment plan and avoid making impulsive decisions based on emotions or market noise. Do your own research and invest in companies with solid fundamentals and a proven track record.
Not Setting Stop-Loss Orders: A stop-loss order is an instruction to sell your stock if it falls below a certain price. This can help you limit your losses and protect your capital. Consider setting stop-loss orders for your stocks, especially if you're investing in volatile or speculative assets. However, be aware that stop-loss orders are not guaranteed to be filled at the exact price you specify, especially during periods of high volatility.
Failing to Diversify: Diversification is key to managing risk in your portfolio. Don't put all your eggs in one basket by investing heavily in a single stock or industry. Spread your investments across a variety of asset classes, sectors, and geographic regions to reduce your overall risk. Rebalance your portfolio regularly to maintain your desired asset allocation.
Ignoring Market Volatility: The stock market can be volatile, and prices can fluctuate rapidly. Ignoring this volatility can lead to panic selling or buying at the wrong time. Stay calm, avoid making impulsive decisions, and focus on your long-term investment goals. Consider using dollar-cost averaging, which involves investing a fixed amount of money at regular intervals, regardless of the market price. This can help you reduce the impact of volatility on your returns.

By avoiding these common mistakes, you can improve your chances of success when selling stocks on Robinhood and achieve your financial goals.

Final Thoughts

Selling stocks on Robinhood doesn't have to be intimidating. By understanding the basics, following the steps outlined in this guide, and avoiding common mistakes, you can confidently manage your investments and make informed decisions. Remember to always do your own research, consider your individual circumstances, and consult with a financial professional if needed. Happy trading, guys!