This analysis describes what Robinhood's agreement states, permits, or reserves. It does not constitute a legal determination about enforceability. Regulatory applicability and practical outcomes may vary by jurisdiction, enforcement context, and individual circumstances. Read our methodology
This clause establishes Robinhood's discretionary authority to execute forced liquidations of account positions based on margin requirements or debt obligations, without requiring advance notice or margin call procedures. The provision creates operational efficiency for the firm's risk management by permitting immediate position closure, though it also establishes that users bear the risk of unfavorable liquidation prices and residual liability.
The updated terms establish new fiduciary verification and personal liability provisions for trust and custodial accounts. Trustees are now required to complete Robinhood's identity verification and onboarding before accessing trust accounts, notify Robinhood promptly of any material changes to the trust (amendments, revocation, trustee changes), and provide the correct taxpayer identification number for the trust. The revised language states that trustees are personally liable for obligations, debts, or negative equity arising from instructions given outside the scope of their authority under the trust instrument or applicable law. Robinhood reserves the right to freeze trust accounts or request updated documentation at any time, and will rely on instructions from any onboarded trustee without requiring consent from co-trustees or verifying compliance with the trust instrument. You should consult a tax advisor regarding the appropriate taxpayer identification number for your trust and review your fiduciary authority under the applicable trust instrument before executing trades.
View change record →Users' positions may be liquidated at Robinhood's discretion without prior notification if margin deficiencies or other obligations arise. Users remain obligated to pay any remaining balance owed to Robinhood after liquidation, even if liquidation prices are unfavorable due to market conditions.
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"Robinhood may, in its discretion and without prior notice to you, liquidate any or all securities or other property in your account to satisfy any margin deficiency or other obligation you owe to Robinhood. You acknowledge that Robinhood is not obligated to make a margin call prior to liquidating your positions, and that market conditions may prevent Robinhood from liquidating positions at favorable prices. You will remain liable for any deficiency balance remaining in your account after liquidation.Excerpt from Robinhood's Customer Agreement (PDF)
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This clause establishes Robinhood's discretionary authority to execute forced liquidations of account positions based on margin requirements or debt obligations, without requiring advance notice or margin call procedures. The provision creates operational efficiency for the firm's risk management by permitting immediate position closure, though it also establishes that users bear the risk of unfavorable liquidation prices and residual liability.
Users' positions may be liquidated at Robinhood's discretion without prior notification if margin deficiencies or other obligations arise. Users remain obligated to pay any remaining balance owed to Robinhood after liquidation, even if liquidation prices are unfavorable due to market conditions.
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