All robinhood accounts are by default margin accounts: https://robinhood.com/us/en/support/articles/robinhood-accou....
You're technically trading on margin when you open a new account and trade before your cash has cleared. This is most likely what happened.
Still, this is a horrible message to show a user who is in that situation and who did not place a sell order themselves (message wording from the article):
“We’ve received your order to sell [#] shares of [stock] at the best available price.”
This is poor communication from RH. A preventable own goal.
But our trades take days.
Gee, I wonder why there's so much hate?
What you and many Robinhood users probably are missing is that your trade actually does take days. Actually go read the Robinhood settlement period info.
https://robinhood.com/us/en/support/articles/withdraw-money-....
This is not explained clearly, but it is essentially 3 days to settle (T+2). So if you sell a position you don't have the cash to buy for three days. If you have traded on Robinhood you have probably noticed that you "immediately" have the buying power from the shares you sold. That's not your cash, because it hasn't settled. For three days that's margin and therefore you could get a margin call.
The instant deposit is limited to $1000 (margin). But there were people saying they were forced to sell out of much larger dollar holdings. Those were probably people that sold out of one stock holding and then immediately bought into GameStop, AMC, etc... So they likely believed they were buying with cash, but they were in reality buying on margin.
Just to be clear, I don't think this is a good thing at all. A brokerage should not be invisibly providing you with margin, it should be very clear to users that this is happening.
If that's the actual intent of this document, it is substantially misleading.