If you’re holding shares of a stock in Robinhood and do not want them lent out to short sellers, you need to disable share lending. On some platforms, you can make money by lending shares that you own to short sellers, but on Robinhood, you don’t get any of the cut. The only way to prevent shares from being lent to short sellers on Robinhood is to change your margin account (the one you have by default on Robinhood) to a cash account.
This is particularly important for anyone participating in the “meme stock” movement. So I’m talking you, apes. Share lending aids hedge funds in obtaining their large short positions, so if you want to help prevent that, you need to go into your Robinhood app and make some changes.
To change your account from margin (also called Instant Settlements in Robinhood) to a cash account, first tap the profile icon in the bottom right of your screen in the app. Then, tap the three lines in the top right right to get to the menu. Once you are on the menu screen, tap Investing to open up a list of options for your account.
Then, scroll down until you see Day Trade Settings. One you open up Day Trade Settings, you’ll see some information about how many day trades you’ve used and a blurb about PDT (the Pattern Day Trader rule). At the very bottom, tap Turn Off Instant Settlement to change your account from a margin account to a cash account. It may take a few days for the change to take affect, but after this process is complete, your shares cannot be lent out to short sellers.
You will also want to keep in mind that your funds will not settle instantly anymore. This is important if you engage in a lot of trades in short periods of time. If you want to have a margin and the ability to turn of share lending, you will need a different broker. Opening an account with WeBull is one way to accomplish this. With WeBull, you can maintain a margin account and simply opt out of the share lending program. If you choose to remain opted in for share lending on WeBull, you will actually earn money for lending your shares. Click here to open an account with WeBull and earn free stock just for signing up.