Can he sell it to cover other positions?
Here’s the clause from the applicable agreement:
“All orders for the purchase of securities given for My Account will be authorized by Me and executed in
reliance on My promise that an actual purchase is intended. It is My obligation to pay for purchases
immediately or on Robinhood’s demand. I understand Robinhood may at any time, in its sole discretion
and without prior notice to Me, prohibit or restrict My ability to trade securities. I further agree not to
allow any person to trade for My Account unless a trading authorization for that person has been
received and approved by Robinhood. Robinhood reserve the right to require full payment in cleared
funds prior to the acceptance of any order. In the event that I fail to provide sufficient funds, Robinhood
may, at its option and without notice to Me, i) charge a reasonable rate of interest, ii) liquidate the
Property subject of the buy order, or iii) sell other Property owned by Me and held in any of My Accounts.
Robinhood may also charge any consequential Loss to My Account. For purposes of this Agreement,
“Property” shall mean all monies, contracts, investments and options, whether for present or future
delivery, and all related distributions, proceeds, products and accessions.”
https://cdn.robinhood.com/assets/robinhood/legal/Robinhood%20Customer%20Agreement.pdf
Only way they can sell is if you fail to pay for a security, or you don’t have the funds to cover the purchase. Period.
In a word, Robin Hood is f#cked.