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I receive an email from Robinhood today that I do not understand. (*value's fictional but in ratio)

Our records show that there wasn't a sufficient deposit or liquidation in your account yesterday to cover your Reg T call, and thus your call is now past due. Your account will be restricted from buying stock today to avoid worsening your Reg T call. If you've already purchased stock today, those positions will be liquidated.

Please sell stock for at least $0.80 in your Robinhood account as soon as possible in order to return your account to good standing. If no action is taken, we will sell a portion of your stocks later today to cover the call. Note that depositing cash is not sufficient, you must sell stock.

I have a Robinhood Gold (margin) account, which my App says is in "Good Health"

Account Total Market Value: $4.18
($1.99 as Gold Used & $2.19 as Portfolio)

Volatility: Low

Initial Requirement: $2.10

Margin Maintenance: $1.04

Today's Day Trade Limit: $4.60

Robinhood Gold: $2.00

Gold Used: $1.99

AML Holding period $0.006

Total Original Deposits: $2

The only action I did yesterday was add 1 share to my position @ $0.046. Can someone please explain what is wrong or does this seem like an erroneous automated message?

Almost every resource I've found online suggests that Reg T does not apply to Margin accounts.

Except Nasdaq Regulation T Call.

Dustin
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1 Answers1

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Regulation T requires that at least 50% of the money you are trading with be your money. If you fail to meet this requirement, stocks will be sold to both reduce what you're borrowing and increase what you're holding until the required 50% margin is met. This only applies to margin accounts.

So, for example, if you hold stocks worth $4.00, your account must be worth at least $2.00, which means you cannot borrow more than $2.00.

David Schwartz
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