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How to Enable and Trade Options on Robinhood


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Robinhood has quickly become one of the most popular online brokerages and investing apps among beginners and experts alike in the retail investing community. However, investors often want more than can be found in simple stock trades. 

One of the most commonly used alternatives to stocks is a derivative investment known as options. Options contracts give investors the right (but not obligation) to purchase a stock or any other financial asset for a predetermined price at a later date. 

But how do you go about trading options on the Robinhood trading app? The steps below should be all you need to get started.

How to Enable Options on Robinhood

The first step to trading stock or exchange-traded fund (ETF) options on Robinhood is to enable options on the trading platform by following the steps below:


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  1. Click “Account”. Once you log into your Robinhood brokerage account, you’ll find an “Account” link on the home screen on the desktop version. On mobile, you can access the account section by clicking the head-and-shoulders icon in the bottom right corner of the screen.  
  2. Click “Settings”. At the bottom of the Account drop-down menu, you’ll find a link titled settings on the desktop version. For mobile, you’ll need to click the three horizontal bars in the upper righthand corner of your screen and choose the settings option. 
  3. See if Options Are Available. In order to trade options on Robinhood, your account must be pretty active and must have proven that you have some experience in the trading environment. If you are eligible for options, there will be an “Options Trading” link at the bottom of the menu on the left hand side of the screen on desktop or at the bottom of your screen on mobile. Click this link. 
  4. Press “Enable”. If options are available on your account, click “Enable.” You may be asked a series of questions to verify your day trading experience. If so, answer the questions to complete your request. 

How to Trade Options on Robinhood

Once you’ve enabled options trading on the platform, follow the steps below to start any options trade:

  1. Click the Magnifying Glass Icon. Start by clicking the magnifying glass icon to browse securities. This should load a search box onto the screen. 
  2. Search for Your Stock or ETF. Now, type in the name or ticker symbol for the stock or ETF you plan on trading options around. Click on the search result you want to navigate to the asset’s detail page. 
  3. Click “Trade”. On the bottom right corner of the asset’s detail page, you’ll find a link titled “Trade”—click that button. 
  4. Click “Trade Options”. W when you click “Trade”, a drop-down menu will appear. From there, click the “Trade Options” link.

How you proceed with your order from this point depends on the kinds of options you’re looking to trade.

How to Buy Calls on Robinhood

Once you’ve completed all the steps in the “How to Trade Options on Robinhood” section above, follow the steps below to buy call options:

  1. Click the “Buy” and “Call” Buttons. At the top of your screen, you’ll find the options “Buy,” “Sell,” “Call,” and “Put” in a horizontal line of buttons. Click the “Buy” and “Call” buttons. 
  2. Choose a Strike Price. The strike price is the price at which the option becomes a win for you. It will always be higher than the current price of the stock. Keep in mind that if the strike price is not met before the expiration date, the option will expire worthless. So, don’t be too aggressive in choosing your strike price. For example, if the stock price is currently $10.00, a $10.50 strike price would be far safer than a $12.00 strike price. 
  3. Choose an Expiration Date. To the right of the “Buy,” “Sell,” “Call,” and “Put” buttons, you’ll find a drop down menu to choose an expiration date. Expiration dates for monthly options are expressed as months and years. For example, an option with a December 21 expiration date will expire on the third friday of December 2021. Many securities also have weekly options with expiration dates that fall on Fridays in between monthlies. When choosing your expiration date, keep in mind that options with a longer time to expiration have a better chance of reaching their strike price and will thus be more expensive to buy. 
  4. Determine How Many Options Contracts You Want. The number of contracts you purchase will directly affect the amount of money you stand to make or lose on the trade. Remember that each call option you buy represents the right, but not the obligation, to buy 100 shares of the underlying asset at the strike price. Determine how many contracts you’d like to purchase, and input that number into the text box on the order page. 
  5. Execute Your Trade. Finally, it’s time to execute your trade based on the parameters you’ve set. Your order will go onto the open market for Robinhood to fill for you.

How to Sell Call Options and Covered Calls on Robinhood

If you’d rather sell call options than buy them, follow the steps below after you select Trade Options:

  1. Click the “Sell” and “Call” Buttons. At the top of your screen, click on the “Sell” and “Call” buttons in the line of buttons titled “Buy,” “Sell,” “Call,” and “Put.” 
  2. Choose a Strike Price. The strike price is the point at which the option becomes profitable for the buyer. As the call option seller, your goal is for the equity to not hit the strike price before the expiration of the contract. So, the further the strike price is from the current price of the equity, the safer the options contract is for the seller. Choose the strike price you feel comfortable with. 
  3. Choose an Expiration Date. Next, you’ll need to choose a date at which the contract will expire. As the seller, the farther out this date is, the more risk you’ll accept when you sell the contract, but also the more premium you’ll collect. 
  4. Decide How Many Contracts You Want to Sell. Next, you’ll need to determine how many contracts you’ll be selling. Keep in mind that each contract represents 100 shares. So, if you’re selling Apple call options and Apple reaches the strike price, you’ll be obligated to sell 100 shares of Apple at the predetermined price per contract. 
  5. Execute Your Trade. Finally, it’s time to execute your trade based on the criteria you’ve set. 

Covered calls are call options you sell on stocks you already own. So, in order to sell covered calls, all you’ll need to do is follow these steps to sell calls on stocks you already own at least 100 shares of. 

How to Buy Puts on Robinhood

Put options become profitable when the price of a stock or ETF falls below the strike price. To buy put options, follow the steps in the “How to Trade Options on Robinhood” section above, then move to the steps below:

  1. Click the “Buy” and “Put” Buttons. At the top of your screen, click on the “Buy” and “Put” buttons in the line of buttons titled “Buy,” “Sell,” “Call,” and “Put.”
  2. Choose a Strike Price. Keep in mind that your trade will not become profitable unless the price of the underlying stock or ETF falls below the strike price. As such, the closer the strike price is to the current price of the asset, the safer the trade is. 
  3. Choose an Expiration Date. Next, you’ll need to choose the expiration date for the option. The longer you give your investment to come to fruition, the better your chances are of it paying off. 
  4. Decide How Many Contracts to Buy. Now, it’s time to decide how many contracts you’ll be purchasing. When making your decision, keep in mind that each contract represents the ability, but not obligation, to sell 100 shares of the underlying asset at a predetermined price.
  5. Execute Your Trade. Finally, it’s time to execute your trade based on the parameters you’ve set. 

How to Sell Puts on Robinhood

If you think the price of a stock is going to head up, selling put options lets you make money betting against those who believe it will fall. To sell puts, start with the steps in the “How to Trade Options on Robinhood” section above. Once those steps are complete, follow the steps below:

  1. Click the “Sell” and “Put” Buttons. At the top of the page, you’ll find a series of buttons titled “Buy,” “Sell,” “Call,” and “Put.” Choose the “Sell” and “Put” options. 
  2. Choose a Strike Price. Next, choose the strike price for the option. As the seller of the put, your hope is for the stock to never fall to or below the strike price. So, the farther the strike is from the current price, the better. 
  3. Choose an Expiration Date. Now, you’ll need to choose an expiration date. As the seller, your hope is that the option doesn’t meet its strike price before the time it expires, so the closer the expiration date is to the current date, the safer the option is for you.  
  4. Decide How Many Contracts to Sell. Next, you’ll need to decide how many contracts to sell. Keep in mind that for each contract you sell, you’ll be obligated to buy 100 shares if the underlying asset reaches the strike price. 
  5. Execute the Trade. Finally, it’s time to execute the trade based on the parameters set forth. 

How to Close Positions on Robinhood

Depending on your options strategy, you may not want to hold your contract all the way to expiration. When it’s time to exit your trade, follow the steps below to close your position. 

  1. Click the Trade You’d Like to Close. On the Robinhood home screen you see as soon as you log in, you’ll find your open trades. Click on the trade you’d like to exit. 
  2. Click “Trade”. Next, you’ll want to click on the “Trade” link at the bottom right of your screen. 
  3. Click “Close.” A dialog box will appear giving you the option to close your position. Click “Close.” 
  4. Decide How Many Contracts to Close. If you have more than one open contract, you’ll need to input the number of contracts you’d like to close. 
  5. Click the “Review” Button. Next, click the “Review” button at the bottom of the dialog box. 
  6. Execute Your Trade. Finally, take a moment to review your trade. If all looks good, it’s time to execute. 

Final Word

The steps above should be all you need to get started trading options on the Robinhood trading app. Keep in mind that due to high short-term volatility in the stock market, trading options can be risky business. As such, it’s imperative that you follow your trading strategy to the letter in order to keep emotions out of the process.

Before you execute an options trade on the Robinhood trading app, or in any brokerage platform, look closely at the spread, or the difference between the bid and ask prices for the asset. Although options trades are part of the commission-free trading program at Robinhood, they aren’t necessarily 100% free, as the cost is baked into the spread. 

The larger the spread is, the higher your overall cost will be. So, make sure the asset you’re trading has a relatively low spread to help reduce the costs associated with your trading activities. 

Joshua Rodriguez has worked in the finance and investing industry for more than a decade. In 2012, he decided he was ready to break free from the 9 to 5 rat race. By 2013, he became his own boss and hasn’t looked back since. Today, Joshua enjoys sharing his experience and expertise with up and comers to help enrich the financial lives of the masses rather than fuel the ongoing economic divide. When he’s not writing, helping up and comers in the freelance industry, and making his own investments and wise financial decisions, Joshua enjoys spending time with his wife, son, daughter, and eight large breed dogs. See what Joshua is up to by following his Twitter or contact him through his website, CNA Finance.

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