Robinhood order rejected or canceled: the reasons, plainly

What does rejected, canceled or pending mean on Robinhood?

One honest limit before the detail. Robinhood's rejection article talks about stock orders. What is said below about options comes from Robinhood's options pages, and where no Robinhood page says something, this guide does not either.

Why did Robinhood reject my limit order?

Because the price looked like a typo. Robinhood calls this a limit order that is "too aggressive" and gives its own example: "a $1,000 limit sell order for a stock currently trading at $5."

Think of it as a spell check for prices. If a share costs $5 and you offer to sell at $1,000, either you know something amazing or your thumb slipped. Robinhood bets on the thumb.

It can happen later too. Robinhood says an order "may be canceled if the price of the security moves significantly away from your limit or stop price." So an order that was fine at lunch can be thrown out at two, because the market walked away from it.

Robinhood does not publish how far is too far. There is no percentage on the page, so there is none here. The fix is the same either way: look at the bid and the ask, and put your price near them.

The other rejection on this list is nobody's fault. An order "might be routed to one of our executing brokers that can't accept it." Robinhood's instruction is to "simply reenter the order." Same order, second try.

Why was my stop order rejected?

Because it was on the wrong side of the price. This one trips up nearly everyone once.

A stop is a tripwire. A sell stop sits below the price and catches you if you fall. A buy stop sits above the price and catches a move up. Put the tripwire where you are already standing and it goes off at once, so Robinhood refuses to set it.

In Robinhood's words, it rejects "a buy stop order below the current market price or a sell stop order above the current market price." It also rejects a stop set "at its current price."

If you wanted to sell at $52 when the stock is at $50, you did not want a stop. You wanted a limit order. A stop says "get me out if it goes against me." A limit says "sell if it gets this good." On thinkorswim instead? How a thinkorswim stop on an option works is its own guide. And when a stop is accepted and still does not save you, that is a different story: why a stop loss does not trigger, in seven reasons.

Why did Robinhood cancel my order?

Four reasons, and the first is the dull one.

The day ended. A good-for-day order "is automatically canceled at market close on the day it's placed if it doesn't execute." That is not a rejection. It is the order doing what it said on the label. A good-til-canceled order on options lasts longer: it "remains open for 90 days until you cancel it, or it's filled."

The stock split. "If a stock undergoes a reverse split, we're required to cancel all open orders." Your limit at $2 means nothing on a stock that is now $20, so everything is wiped and you start again.

Buying power. Robinhood says good-til-canceled buy orders "could be canceled if your investing account doesn't have enough buying power to support them." Buying power is the money you can use to buy. If your account falls, the order you parked last week may no longer be one you can pay for, and Robinhood takes it down "because they would put you at a much higher risk of a margin call."

The price ran away. The risk check from the section above, arriving late.

There is a cousin of the buying power rule in the options pages. After an early assignment, "if you have an account deficit, you can't open new positions until the deficit is resolved." That is a block on opening new positions, in Robinhood's own words.

Why is my Robinhood order pending and not filling?

Because a trade needs two people, and the second one has not turned up. Robinhood says so directly: "there must be a buyer and seller on both sides of the trade for an order to execute."

The part that fools people is the price on the screen. Robinhood: the price displayed "is the last trade price," and "not the price at which shares are currently available." So you can set a limit at exactly the number the app shows and still sit there. That number is where the last trade happened. It is a photo, not a promise.

Three more ways to be left waiting:

• A halt. An exchange or a regulator has stopped trading in that symbol; the halts are started by them, "not by Robinhood." You "can place new orders during a trading halt, but new or existing orders will not be processed until the market reopens or the trading halt is removed." Robinhood adds: "This also applies to options orders." A good-for-day order still dies at the close, halt or no halt.
• The open, for options. Options "don't begin trading until trading has begun at the primary listing exchange for the underlying stock," which may be "a few minutes after 9:30 AM ET." At 9:30 and ten seconds, your option may simply not be open yet.
• A price of one cent. During a halt "the mark price defaults to the $0.01 in the app." The same shows when a contract has no bids. Your option did not go to a penny. Nobody is quoting it.

Can Robinhood sell my option without asking me?

On expiration day, yes, and it looks exactly like an order you did not place.

Here is the situation. You own a call that is about to expire in the money. Exercising it means buying 100 shares. If the strike is $50, that is $5,000. If your account has $600 in it, you cannot do that.

Robinhood's expiration article says what happens next: "If you don't have enough buying power or underlying shares to exercise your option, we may attempt to sell the contract in the market for you within the last 30 minutes before the market closes on the option's expiration date." And it does not promise to wait that long: "we may take action on a position outside of that 30-minute window based on market conditions."

So the sale you find in your history at the end of the day was Robinhood, not a glitch: a $600 account cannot take delivery of $5,000 of stock. The same article says managing the position "is ultimately your responsibility." Put plainly: if you want to choose the price you get out at, get out before the last half hour.

One more thing that can stop an options order before it starts. Robinhood approves options in levels. On the page, Level 2 covers "Long calls, Covered calls, and Long puts," and Level 3 adds spreads. If the trade you are trying is a spread and your account is Level 2, it is not a trade you have been given.

Where Degen Pro fits

It does not fit here, and it would be wrong to pretend. Degen Pro is a Mac app for Interactive Brokers; the stop, the keys and the lock need Interactive Brokers, and it does not connect to Robinhood. What works on any broker is the habit under it: decide before the open how much you can lose today, and stop when you get there. The loss budget and position size calculator is free and does that arithmetic in your browser for any account. If you are curious how the same problem looks on a broker with far more warning messages, the IBKR rejection messages are explained here.

Before you place it again

1. Which word is it: rejected, canceled or pending. They are three different problems.
2. Rejected limit: compare your price with the bid and ask. Was it a typo.
3. Rejected stop: a sell stop goes below the price, a buy stop above. Never on it.
4. Canceled: was it good-for-day. Did the stock split. Is your buying power lower than last week.
5. Pending: is the symbol halted. Is your limit at the last trade instead of at the bid or ask.
6. Expiration day: if you cannot afford to exercise, close it yourself before the last 30 minutes.

None of this is investment advice. Trading involves risk of loss, and an order that goes through is not thereby a good idea.