The Short Answer: Robinhood Does Not Support Traditional Short Selling
This surprises a lot of new traders. Robinhood, one of the most popular trading apps in America, does not allow you to short sell stocks in the traditional way. You cannot borrow shares, sell them, and buy them back at a lower price on Robinhood.
If you have never shorted before and want to understand the basics, read our complete guide to short selling first.
Why Robinhood Does Not Offer Short Selling
Robinhood built its platform for simplicity. Traditional short selling requires margin lending, share borrowing infrastructure, and risk management systems that add complexity. Robinhood chose to skip it.
This is like a restaurant that does not serve alcohol. It simplifies their operations, reduces liability, and keeps the experience straightforward. But if you want a beer with dinner, you need to go somewhere else.
Your Alternative on Robinhood: Put Options
While you cannot short sell directly, Robinhood does support put options, which let you profit when a stock goes down. A put option gives you the right to sell a stock at a specific price before a specific date.
Here is how it works in simple terms:
- You buy a put option on XYZ stock with a strike price of $50, expiring in 30 days
- If XYZ drops to $40, your put option increases in value because you have the right to sell at $50 something worth $40
- You sell the put option for a profit
The advantage of puts over traditional shorting: your maximum loss is limited to what you paid for the option. No unlimited loss risk. No margin calls. No borrow fees.
The disadvantage: options expire. If the stock does not drop before your expiration date, you lose the entire premium you paid.
For a deeper guide on using options to short, see our article on how to short a stock with options.
Brokers That Do Support Short Selling
If you specifically want to short sell stocks (not use options), consider these brokers:
- Webull: Free commissions, supports short selling with margin account. See our Webull short selling guide.
- Interactive Brokers: Best short inventory and lowest borrow rates for active traders.
- Fidelity: Large short inventory, reliable platform. See our Fidelity short selling guide.
- E*TRADE: Supports short selling with Power E*TRADE platform. See our E*TRADE short selling guide.
- Centerpoint Securities: Specializes in hard-to-borrow locates for serious short sellers.
- Cobra Trading: Excellent short availability for active day traders.
Should You Stay on Robinhood or Switch?
If you primarily buy and hold stocks, or if you only want to profit from drops occasionally using put options, Robinhood is fine. Keep it simple.
If you want to actively short sell, day trade both long and short, and need access to Level 2 data, real short inventory, and professional tools, you should open a second account at a broker that supports short selling. Many traders keep their Robinhood for long-term investments and use a separate broker for active day trading.
You do not have to choose one or the other. Use the right tool for each job.
For a full review of Robinhood’s strengths and limitations, see our Robinhood broker review.
Disclaimer: This article is for educational purposes only and does not constitute financial advice. Options trading and short selling involve substantial risk of loss. Always consult a qualified financial advisor before making trading decisions.