Selling Stocks On Cash App: A Simple Guide

Hey guys, ever wondered how to offload those stocks you bought on Cash App? It’s actually way simpler than you might think, and we're going to break it down for you. So, you’ve got some gains, or maybe you just need to liquidate, and you're looking at your Cash App portfolio thinking, "Alright, how do I actually sell this stuff?" Well, you’ve come to the right place. In this guide, we’ll walk you through the entire process, from finding your stocks to cashing out your earnings. We’ll cover everything you need to know, so stick around!

Understanding Cash App Investing

Before we dive into the nitty-gritty of selling, let's quickly touch upon how Cash App handles stock investing. Cash App made investing super accessible, especially for beginners. They allow you to buy and sell stocks right from your phone, making it incredibly convenient. You can invest with small amounts, which is awesome for dipping your toes into the market. However, it's important to remember that Cash App is designed for simplicity, and while it offers basic investing features, it doesn't have all the bells and whistles of a full-fledged brokerage account. This means things like advanced charting tools, extensive research reports, or complex order types aren't available. But for straightforward buying and selling, it’s a solid option. When you buy stocks on Cash App, you’re essentially buying fractional shares or whole shares of companies. These shares are held by Cash App's partner broker, DriveWealth, LLC. This is a crucial point because it means Cash App isn't directly holding your stocks in your name in the same way a traditional brokerage might. They act as an intermediary. So, when you decide to sell, you're interacting with Cash App's platform, which then communicates with DriveWealth to execute the trade. This behind-the-scenes process ensures your trades are handled properly and safely. Keep in mind that selling stocks involves considerations like capital gains taxes, which depend on how long you held the stock and your tax bracket. It's always a good idea to consult with a tax professional if you have any doubts about your tax obligations. For now, let’s focus on the mechanics of selling your stocks on the app itself. It’s a process that’s designed to be as user-friendly as possible, mirroring the ease with which you likely purchased them.

The Selling Process: Step-by-Step

Alright, let's get down to business. Selling your stocks on Cash App is a pretty straightforward process. First things first, you need to open your Cash App and navigate to the Investing tab. You can usually find this by tapping the little building icon at the bottom left of your screen. Once you’re in the Investing tab, you’ll see a section that lists the stocks you currently own. Look for the specific stock you want to sell. Tap on it, and you’ll see details about your investment, including the current price and your profit or loss. Now, here’s the key part: you’ll see an option to either "Buy" or "Sell." Naturally, you’ll want to tap the Sell button. Cash App will then ask you how much of the stock you want to sell. You can choose to sell all of it, or just a portion. You can enter a specific dollar amount or a percentage of your holdings. After you’ve decided on the amount, you’ll need to confirm the transaction. This usually involves reviewing the sale details, including the estimated amount you’ll receive after the sale. Once you’re happy with everything, you’ll confirm the sale. The funds from your sale will then be added to your Cash App balance. It's important to note that stock sales on Cash App typically execute at the current market price. This means the price might fluctuate slightly between the time you initiate the sale and when it’s fully processed. Cash App usually provides an estimated amount, but the final amount received might be a little different. Also, keep in mind that there are no direct selling fees when you sell stocks on Cash App, which is a pretty sweet deal! The app makes its money through the bid-ask spread, meaning the price you sell at might be slightly lower than the actual market price. Once the sale is complete, the funds will appear in your Cash App balance. From there, you can choose to keep the money in your Cash App balance, use it to buy other stocks, or transfer it to your linked bank account. The transfer to your bank account usually takes a business day or two. So, in a nutshell: find the stock, tap sell, choose the amount, confirm, and voilà! Your cash is on its way. It's designed to be as simple as buying, making it super accessible for everyone.

What Happens After You Sell?

So, you've hit that sell button, and the trade is confirmed. What’s next, guys? This is where the magic happens, and your cash starts making its way back to you. Once your stock sale is executed on Cash App, the proceeds are typically added to your Cash App balance. Think of it like this: you sold your shares, and now the cash equivalent is sitting in your digital wallet within the app. From your Cash App balance, you have a few options, and this is where you get to decide what to do with your newfound funds. You can choose to keep the money in your Cash App balance. This is handy if you plan on reinvesting in other stocks within Cash App shortly. It’s like having a mini-brokerage account and a cash stash all in one. Alternatively, and this is usually the most common move, you can transfer the funds to your linked bank account. To do this, you’ll go to your Cash App balance, tap on "Cash Out," and select the amount you want to transfer. You’ll usually have two options for this: a standard transfer, which is typically free and takes 1-3 business days to complete, or an instant transfer, which costs a small fee (usually around 1.5%) but gets the money into your bank account within minutes. It’s like having an ATM inside your app! Make sure you have a bank account linked to your Cash App to facilitate this transfer. The process is generally smooth, but like any bank transfer, it can sometimes take a little longer depending on your bank and the time of day the transfer is initiated. Another thing to consider is taxes. If you sold your stocks for more than you bought them for, you’ve likely realized a capital gain. Depending on how long you held the stock (short-term vs. long-term capital gains), and your overall income, you might owe taxes on these gains. Cash App itself doesn't typically withhold taxes on stock sales, so it’s your responsibility to track your gains and report them to the IRS. This is why keeping good records is super important! You might receive a Form 1099-B from Cash App's partner broker (DriveWealth) detailing your sales, which will be helpful for tax purposes. Always consult with a tax professional to understand your specific tax situation. So, to recap: your cash lands in your Cash App balance, then you decide whether to leave it there, transfer it to your bank (instantly or standard), and remember those potential tax implications. Easy peasy, right?

Important Considerations and Limitations

Alright, before you go all-in on selling your stocks, let's talk about some important considerations and limitations you need to be aware of when using Cash App for selling. It’s not all sunshine and rainbows, and knowing these things can save you a headache down the line. First off, and this is a big one, Cash App does not support transferring stocks out to another brokerage account. This means if you bought a stock on Cash App and later decide you want to move that same stock to Fidelity, Schwab, or any other broker, you’re out of luck. The only way to move your investment is to sell it on Cash App and then use the cash to buy the stock again at your preferred brokerage. This is a significant limitation compared to traditional investment platforms. So, if you're thinking long-term and want flexibility with your holdings, you might want to consider starting with a more robust brokerage from the get-go. Another point to understand is the trading hours. Just like buying, you can only sell stocks during market hours. If you try to place a sell order outside of these hours, it will typically be queued up to execute when the market opens. This means you could be subject to price changes between when you place your order and when it actually executes. So, plan accordingly and try to sell when the market is open. Also, remember that Cash App uses a partner broker, DriveWealth, LLC, to handle its stock trades. While this partnership allows Cash App to offer investing services, it also means you are subject to DriveWealth's terms and conditions, as well as Cash App's. This is usually not an issue for simple buy/sell operations, but it's good to be aware of the underlying structure. Regarding fees, as we mentioned, Cash App doesn't charge explicit selling fees. However, they do make money on the bid-ask spread. This means the price at which you sell might be slightly different (usually a tiny bit lower) than the absolute mid-market price. For most small investors, this difference is negligible, but it's something to be aware of, especially if you're trading large volumes or highly volatile stocks. Finally, remember the tax implications we discussed. Selling stocks can trigger capital gains taxes. While Cash App makes it easy to buy and sell, it’s crucial that you keep track of your purchase prices and sale prices to accurately report your taxes. You'll want to look out for tax forms like the 1099-B, which should be provided by DriveWealth. So, to sum up the key limitations: no stock transfers, adhere to market hours, understand the partner broker relationship, be aware of the bid-ask spread, and don't forget your tax responsibilities. These are critical points to keep in mind to ensure a smooth selling experience.

Frequently Asked Questions (FAQs)

Let's tackle some common questions you guys might have about selling stocks on Cash App. We want to make sure you're fully informed!

Can I sell stocks on Cash App 24/7?

No, you can only sell stocks during U.S. stock market trading hours. If you place a sell order outside of these hours, it will be processed when the market reopens.

How long does it take to get my money after selling stocks?

Once the sale is executed, the funds will appear in your Cash App balance almost immediately. However, to transfer those funds to your bank account, it typically takes 1-3 business days for a standard transfer, or a few minutes for an instant transfer (which has a fee).

Are there fees for selling stocks on Cash App?

Cash App itself does not charge explicit selling fees. They generate revenue through the bid-ask spread, meaning the selling price might be slightly different from the market price.

Can I transfer my stocks from Cash App to another brokerage?

Unfortunately, no. Cash App does not support transferring stocks to other brokerage accounts. You would need to sell your stocks on Cash App and then use the cash to buy them at your desired brokerage.

What if the stock price changes after I place a sell order?

Stock sales on Cash App are executed at the current market price. While Cash App provides an estimate, the final amount you receive could be slightly different if the price fluctuates between when you initiate the order and when it's fully processed during market hours.

Do I need to report my stock sales for taxes?

Yes, absolutely! If you sold stocks for a profit (capital gains), you are responsible for reporting these gains on your taxes. Keep records of your transactions, as you may receive tax forms like a 1099-B from Cash App's partner broker, DriveWealth.

Conclusion: Selling Made Easy

So there you have it, guys! Selling stocks on Cash App is designed to be as simple and user-friendly as possible. You can easily navigate to your investments, tap 'Sell,' choose your amount, confirm, and have the cash back in your Cash App balance. From there, you have the flexibility to keep it, transfer it to your bank account (instantly or standard), or reinvest it. While there are some limitations, like the inability to transfer stocks directly to another broker and the need to adhere to market hours, the overall process is incredibly accessible for beginners and casual investors. Just remember to keep those tax implications in mind, and you're golden! Happy investing (and selling)!