Being put in a 90 day buy restriction can come off as a massive shock to the user, and they might start panicking over it. However, there is nothing to worry about, as in this article, you will learn everything there is to know about the 90-day restriction policies.
What Is A 90-day Restriction On Robinhood?
90-day Restriction on Robinhood will happen If you make a fourth-day trade in the five-day window, your account will be flagged as a pattern day trader for 90 days. This means that you cannot do a day trade for 90 days unless your portfolio value (excluding cryptocurrency positions) exceeds $25,000.
Also, the 5th trading day does not necessarily coincide with a calendar week. For example, there may be 5 trading days from Wednesday to Tuesday.
You’re limited to three trades in a five trading days window until & unless you have $25000 or more in your account before the market closes. Placing the fourth trade will result in your account being flagged as a Pattern Day Trader.
In this scenario, ensure that you have at least $25000 in your account before the market closes on that prior day. This is necessary if you wish to continue trading the following day. Else, you’ll have your account locked for 90 days.
How Do I Remove The 90-days Restriction On Robinhood?
Your account will be flagged as a Pattern Day Trader and will have a 90-days restriction on trading. So, if you have been penalized, then ensure that your account balance is always at or above $25000 for 90 days to remove it.
You can remove 90 days restriction on Robinhood by closing the trading day at or above $25000. But frequent violations may cause the broker to limit your account activity to only closing positions.
How Do I Get Out Of 90-day Restrictions?
To get around the 90-day restrictions, you can:
- Deal in cash, if that works well for you.
- Make fewer trades as is prescribed.
- Try using multiple accounts by opening an account on a different brokerage.
- by closing the trading day at or above $25000.
Note: Your trading position must be devoid of any cryptocurrency positions and must be all investments in stock, mutual funds, etc.
Also Read: Fix: Robinhood Application Under Review
What Causes A 90-Day Restriction On Robinhood?
The reason why Robinhood puts a 90-day restriction is that they have flagged you as a pattern day trader. Here is what a pattern day trade looks like-
Suppose a trader is making more than four-day trades within the five business trading days and represents 6 percent of your total trades.
According to the Robinhood regulations, you are supposed to be limited to making about three-day transactions within the week. The only exception to the rule is if you have $25,000 in your Robinhood Instant or Gold account(Devoid of cryptocurrencies).
Can I Still Trade With A 90-day Restriction on Robinhood?
Yes, a user cannot place any day trade for the next 90 days, but one can also make a long-term investment, which doesn’t need to be closed within the day.
Why Is My Robinhood Account Restricted From Purchasing?
There are many reasons why a Robinhood might get restricted; here are just some of the grounds-
There have been too many Transfer Reversals with your bank account.
You’ve given out account information that is Incorrect or Outdated Information.
A Fraud Inquiry is being conducted on your Robinhood account.
You have many Account Levies that need to be resolved.
Also Read: This Stock is Not Supported on Robinhood
How Do I Remove The Robinhood Account Restricted From The Purchase?
You can get into contact with the representatives from the Robinhood application to remove the restriction or simply increase your portfolio size. There are no other ways for one to remove the Robinhood account restriction.
How Long Is The 90-day Restriction On Robinhood?
The duration of the restriction is 90 days. The account will be locked for 90 days.
Final Thoughts
You have now learned about the various facets of the 90-day account restriction policy. There is no need to worry as your account is not getting suspended or barred.
However, if you do not have the $25,000 to invest in your portfolio, then one has to be extremely careful when day trading.
Also Read: Why does Robinhood Need my Bank Login?
