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You’re trying to buy stock on Robinhood but can’t. An error message pops up saying you don’t have enough buying power. Why is that coming up and what do you need to do to be able to buy the stock that you want to?
Robinhood says you don’t have enough buying power because either your previous stock sale or deposit hasn’t cleared or you aren’t setting a limit order for the stock.
Buying stock on Robinhood defaults to a market order which means you will have to pay whatever the current market price is for that stock. That market price is always fluctuating so when you try and place an order it might have gone up meaning you don’t have enough money (or buying power).
A simple way to get around this is change your order to a limit order. That means the stock will only buy at a specific price and in turn that should remove the error that you are seeing,
If you are placing a limit order and you are still getting this error then it’s likely you recently sold a stock/option and the funds haven’t settled yet.
Shares take 2 days to settle while options take 1 day to settle. So you might have money in your account but can’t use it to trade with (buying power) until the shares or options settle.
In this article, I am going to fully troubleshoot the “not enough buying power” issue and explain what exactly you can do to fix it so you can purchase stocks smoothly on Robinhood.
I ran into this error when I first started trading on the app in 2019, so I know how frustrating it can be. Don’t worry though because I’m going to help you get to the bottom of it!
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Why Does Robinhood Say I Don’t Have Enough Buying Power?
As I mentioned above, there are multiple reasons why this could happen.
The limit order issue is because Robinhood requires you to have more funds in your account than the displayed (or quoted) price of whatever stock or crypto you want to buy when you are placing a market order.
If you don’t, you’ll be notified that you don’t have enough “buying power” and the order won’t go through.
The amount you’ll need to have over the market order is usually at least 5% more than the quoted price. For instance, if you want to buy a stock that is trading at $100, you’ll need buying power of at least $105.
In this scenario, the extra $5 (or 5%) acts as a buffer to ensure the order will still go through in case of a market movement that causes the stock’s price to increase from the time you make the purchase to the time the order processes.
As mentioned, you can get around this extra money requirement by setting a limit order instead.
How Do You Fix The “Insufficient Buying Power” Error?
I already established the fact that you need sufficient buying power when purchasing stock, ETFs, crypto, or securities on Robinhood. Now let’s talk about fixing the error.
There’s actually a few different ways you can fix the “not enough buying power” error on Robinhood:
Deposit More Funds With A Bank Transfer
The first method is to load more money into your Robinhood account. This can be done via bank transfer.
The caveat with this method is that it can take up to 5 days for the funds to process.
However, if you’re using Robinhood Instant and/or Gold you can access a fraction of your deposit immediately after the transfer is initiated.
If you have a Robinhood Instant account, you’ll be able to access up to $1,000 from your deposit immediately. Gold account members can access more depending on their account tier.
Keep in mind, while instant accounts are free, Robinhood Gold accounts cost $5 per month as they offer many different perks you won’t get with a free account.
Liquidate Some Of Your Positions
Outside of making a deposit from your bank account, you can also liquidate some of your positions to fix the “insufficient buying power” error.
Proceeds you receive from a stock sale will immediately boost your Robinhood buying power (if you have Robinhood Instant).
Keep in mind, even after depositing funds or liquidating your positions, there could be a delay or a technical issue with the Robinhood app that prevents your buying power from updating.
In these cases, your ability to complete an order for a stock could still be hindered.
Cryptocurrency Buying Power on Robinhood
From Bitcoin to Dogecoin – Elon Musk’s favorite cryptocurrency – there are more than a dozen cryptocurrencies you can buy and sell on Robinhood.
Buying power for Robinhood Crypto (which is the division of Robinhood that handles these types of trades) works a bit differently than it does for stocks:
- For starters, you aren’t allowed to borrow funds from the broker to boost your cryptocurrency buying power.
- Additionally, if you want to use proceeds from stock sales to buy crypto you’re forced to wait 2 full trading days for the funds to settle.
- Proceeds from crypto sales and a limited cash deposit are immediately available to be used on crypto purchases
In the past, cash deposits used to provide an instantaneous crypto buying power boost. This is no longer allowed.
Many believe this was due to the notorious GameStop short squeeze incident as it occurred around the same time and led to many buying power errors for users who were trying to purchase Dogecoin.
In fact, many in the crypto trading community have been outspoken in their displeasure with this change.
So..”why does Robinhood say I don’t have enough buying power?” As I covered in this article:
- You need to have more (at least 5% in most cases) than the displayed price of a stock in order to complete your purchase order or set a limit order.
- You can add funds via bank transfer (which takes up to 5 days to process) OR use proceeds from a stock sale to increase your buying power.
- Boosting buying power for crypto stocks is different in that you won’t be able to borrow money from the broker and will need to wait 3 days for funds from a stock sale to process.
To avoid this error message, you should maintain your buying power by using the app more frequently to sell stocks you own and load your account with funds whenever you can.