"when Robinhood users hit sell and then use the funds to re-buy another stock or back into the same stock, they're buying on margin. Technically the first sell doesn't clear for several days, so the subsequent purchase is made on margin."
This seems like a key piece missing from lots of explanations I've read. Thanks.
Robinhood has a little note during new account setup about how your account will default to being a margin account.
They don't show any of the details on the main screens after that, though.
Normally, it doesn't matter because Robinhood eats the tiny margin cost for the customer. They make up for it by selling the order flow. This only works as long as interest rates are low and, importantly, they can get enough credit to cover it all.
In times of unprecedented volatility and unprecedented risky trading behavior, securing that debt becomes non-trivial. Robinhood's debtors have no desire to be left holding the bag if something blows up.
This seems like a key piece missing from lots of explanations I've read. Thanks.