Can you do stock options on Robinhood?

Can you do stock options on Robinhood?

If you are asking "can you do stock options on robinhood", the short answer is yes. This article explains whether Robinhood supports stock and ETF options, what option types are available, how to get approval, the platform tools you'll use, fees and settlement, risks and disclosures, tax basics, and practical best practices for new options traders.

Readers will leave with a clear picture of how to enable and trade options on Robinhood, what to expect from order mechanics and settlement, and where to find official resources and educational materials. If you are also exploring alternatives for trading and learning, this article notes Bitget as a recommended platform for crypto trading and education.

As of 2026-01-15, according to Reuters, Robinhood continues to offer commission-free stock and ETF options trading while updating its platform features and educational materials to support options users.

Overview of Options Trading on Robinhood

Can you do stock options on robinhood? Yes. Robinhood offers options trading on listed equities (individual stocks) and many exchange-traded funds (ETFs). The platform emphasizes commission-free stock and ETF options contracts (no per-contract commission), accessible embedded option chains, and an interface designed for retail investors.

Core platform features for options traders include an interactive options chain display, a strategy builder for multi-leg orders, integrated option Greeks and implied volatility indicators, and advanced charts with technical overlays. Robinhood positions its options product as accessible and low-cost: stock and ETF options trade commission-free, though certain index contract fees, regulatory fees, and clearing fees may apply depending on the contract and jurisdiction.

Benefits include low friction to enter basic options trades, mobile-first order entry, and integrated market data. Risks include the typical exposures tied to options (time decay, volatility, and the potential for large losses on uncovered positions).

Types of Options You Can Trade

• Standard call and put options: Buy call options to gain upside exposure; buy put options to hedge or gain downside exposure.
• Multi-leg strategies: Robinhood supports spreads and other multi-leg orders via its strategy builder (for example, vertical spreads, iron condors, straddles, strangles, and calendar spreads), subject to approval level and liquidity.
• Weekly and monthly options: Many symbols have weekly (short-dated) options in addition to standard monthly expirations.
• LEAPS: Long-dated options (LEAPS) with expirations up to multiple years are available on many underlying securities.
• Index options: Robinhood may offer some index options, though availability and fee structures for index contracts can differ and may incur specific clearing fees.

Availability depends on the underlying security’s listing, liquidity, and Robinhood’s internal eligibility rules. Not every multi-leg or advanced order is available to every account — approval levels and account type matter.

Eligibility, Account Types, and Approval Process

To trade options on Robinhood you must have an approved brokerage account and complete the options application. The process collects personal and financial information, trading experience, and asks suitability questions.

Account types:

• Cash accounts: Settlement uses settled cash. Certain options strategies that require margin or shorting are not available in pure cash accounts.
• Margin accounts: Enable margin borrowing for eligible customers. Margin accounts are required for many advanced or margin-enabled option strategies.
• Robinhood Gold: A subscription service that provides higher margin tiers, research, and instant deposits; it can expand the set of strategies you may use, subject to approval.

Robinhood uses a tiered options approval system. Each level grants access to progressively complex strategies:

• Level 1: Covered calls, protective puts, and basic long options trades.
• Level 2: Spreads (debit and credit), limited multi-leg strategies.
• Level 3+: Advanced spreads, uncovered positions may be restricted and typically require higher approval and margin.

Approval is based on financial profile, trading experience, and risk tolerance. Some account types (e.g., certain retirement accounts) have additional restrictions.

How Robinhood Evaluates Applicants

Robinhood will ask for information including income, net worth, liquid net worth, employment status, and options trading experience (number of trades, familiarity with spreads, etc.).

Responses feed an automated suitability check. Key factors that influence approval level:

• Trading experience with options and derivatives.
• Annual income and net worth (higher figures may qualify for more advanced strategies).
• Employment and investing objectives (speculation vs. hedging).
• Account type and whether you request margin or Robinhood Gold.

Delays or denials can occur if documentation is incomplete, if suitability cannot be established, or if regulatory checks (identity verification, credit checks for margin) take longer. If denied, Robinhood typically provides a reason and may allow re-application after meeting certain conditions.

Enabling Options Trading — Step‑by‑Step

1. Open and verify your Robinhood brokerage account (provide ID and personal details).
2. Navigate to the account settings or the Options menu in the app/web.
3. Select the prompt to enable options trading and complete the options application form.
4. Provide requested financial data and answer experience questions honestly.
5. If applying for margin or Robinhood Gold, accept the terms and verify additional eligibility.
6. Wait for approval notification — timeline usually ranges from a few hours to several business days.

Typical verification includes identity checks, review of your stated experience, and validation of financial data. If additional documentation is needed, Robinhood will notify you through the app.

Platform Tools and Features for Options Traders

Robinhood provides multiple tools tailored for retail options traders:

• Options chain display: See strikes, expirations, bid/ask, implied volatility, open interest, and Greeks. The chain supports sorting and quick action buttons for buy/sell.
• Strategy builder: Construct multi-leg orders (vertical spreads, iron condors, straddles, strangles). The builder calculates maximum risk/reward and displays possible outcomes.
• Advanced charts: Candlestick charts with technical indicators (moving averages, RSI, MACD) and drawing tools to support trade decisions.
• Two-sided chain / Legend: Clear labeling of bid/ask and risk views for each leg.
• Watchlists and alerts: Track underlying instruments and receive notifications for price or volatility thresholds.
• Hypothetical returns and profit/loss diagrams: Visualize potential payoff at expiration and before-expiration scenarios.
• Educational content: Robinhood Learn articles, help center guides, and short video explainers introduce options concepts and common strategies.

These tools are aimed at simplifying order entry while providing key metrics traders need, but they do not replace deep study of options mechanics and risk management.

Costs, Fees, and Settlement

Robinhood’s pricing model for options emphasizes commission-free trading for stock and ETF options: there are no per-contract commissions charged by Robinhood for these contracts. However, additional fees may apply:

• Index contract fees: Certain index options or non-standard contracts may carry exchange or clearing fees.
• Regulatory and exchange fees: Fees such as the Options Regulatory Fee (ORF) and other exchange-specific charges may be passed through as required.
• Margin interest: If you use margin, interest on borrowed funds is charged according to your margin agreement and Robinhood Gold terms.
• Assignment and exercise fees: Clearing fees may be assessed through the Options Clearing Corporation (OCC) when contracts are exercised or assigned; these are usually small but can vary.

Settlement and clearing:

• Options are standardized contracts cleared through the Options Clearing Corporation (OCC).
• Each options contract typically represents 100 shares of the underlying (contract multiplier = 100), so premium and cash requirements should be multiplied accordingly.
• Standard equity option exercise/assignment follows OCC rules and settlement cycles (exercise results in stock delivery or obligation, typically settled on T+2 for equities where applicable).

Always review Robinhood’s current fee schedule and options disclosure documents for precise and up-to-date fee information.

Mechanics: Buying, Selling, Exercising, and Assignment

• Placing orders: Use the options chain or strategy builder to choose strike(s), expiration, and order type (market, limit). Review estimated cost, buying power impact, and potential outcomes before submitting.
• Execution: Orders route to exchanges and are filled according to market liquidity and price. Multi-leg orders aim for simultaneous execution but may fill leg-by-leg if liquidity is limited.
• Selling to close vs. exercising: Most traders close positions by selling an option before expiration. Exercising converts an in-the-money option into the underlying stock position (buying for calls, selling for puts), which requires sufficient capital or margin.
• Assignment: Option sellers (writers) can be assigned an exercise at any time for American-style options. Assignment means the seller must fulfill the contract: deliver stock (for short calls) or buy stock (for short puts).
• Early exercise rules: Many equity options are American-style and can be exercised any time before expiration. Early exercise is uncommon for calls unless underlying pays a dividend or other specific circumstances.
• Settlement timelines: After exercise, the underlying stock trade settles per the brokerage’s standard process; cash/margin requirements apply immediately upon exercise/assignment.

Understanding these mechanics is crucial because exercising or being assigned can create stock positions with different capital and margin implications than the original options trade.

Risks, Disclosures, and Regulatory Documents

Options carry distinct risks compared with stock trading:

• Time decay: Options lose extrinsic value as expiration approaches; long option holders can lose the entire premium paid.
• Leverage and concentration: Options amplify exposure; small price moves in the underlying can cause large percentage changes in option value.
• Potential for unlimited loss: Certain uncovered (naked) strategies, particularly short calls, expose sellers to theoretically unlimited losses.
• Assignment risk: Short option sellers face the risk of assignment at any time for American-style options.

Regulatory disclosures to read before trading:

• Characteristics and Risks of Standardized Options (commonly called the “options disclosure document”): a mandated document that explains standardized options risks and mechanics.
• Robinhood’s options-specific disclosures and educational materials: these describe platform rules, approval levels, and margin requirements.

Robinhood must provide these documents and present warnings during the approval process. Traders should read and confirm understanding of these disclosures before transacting.

Tax Treatment and Recordkeeping

Tax implications of options trades can vary and depend on transactions and holding periods:

• Short-term vs. long-term: Gains on exercised or sold options may be treated as short-term capital gains if positions are held for one year or less; specific rules apply depending on whether trades result in stock positions.
• Exercise and sale: Exercising an option and immediately selling the underlying creates an ordinary short-term transaction for the combined cost basis; holding the underlying after exercise changes the cost basis and holding period.
• Assignment and corporate actions: Assignment or corporate actions (splits, mergers, dividends) affect basis and tax reporting.

Keep detailed trade records: trade confirmations, account statements, and exercise/assignment notices. Consult a qualified tax advisor for precise treatment and reporting. Robinhood provides tax documents and consolidated reports to help with filing.

Limitations, Geographic & Account Restrictions

• Jurisdictional restrictions: Not all countries or US states may allow options trading on Robinhood due to local regulatory rules.
• Account-type limits: Certain account types, such as some retirement or custodial accounts, may have restricted options access or disallowed strategies.
• Product availability: Not every underlying symbol has options listed, and some complex strategies require higher approval levels and margin.
• Trading hours: Options typically trade during regular market hours; extended-hour liquidity for options is limited or unavailable.

Check Robinhood’s account disclosures for your state and account type to confirm what is available to you.

Best Practices and Risk Management

• Start with education: Read the Options Disclosure Document and basic options primers before placing trades.
• Use small position sizes: Limit risk per trade relative to your account size while learning.
• Paper trade or simulate: Practice strategies in simulated environments before committing real capital.
• Understand margin: Know how margin affects buying power and potential for margin calls.
• Monitor assignment risk: If you sell options, be prepared for assignment and its consequences.
• Set position limits and risk controls: Define maximum loss per trade and overall portfolio exposure.
• Read confirmations and settlement notices: Ensure you track exercised, assigned, or expired positions.

These practices reduce common mistakes made by new options traders and promote disciplined decision-making.

Educational Resources and Where to Learn More

Recommended starting points on Robinhood:

• Robinhood Learn articles on options basics and strategy guides.
• In-app tooltips and short video explainers covering Greeks, implied volatility, and multi-leg orders.

Third-party resources:

• Investopedia: accessible step-by-step primers and examples.
• Options Clearing Corporation (OCC): official materials and options disclosure documents.

Mandatory documents to read:

• Characteristics and Risks of Standardized Options (options disclosure document).
• Robinhood’s options agreement, fee schedule, and margin disclosure.

Bitget resources:

• For traders also exploring crypto and related derivatives education, Bitget offers guides, tutorials, and a wallet product for web3 users. Explore Bitget’s educational center to broaden derivative knowledge in digital assets.

Alternatives and Comparison with Other Brokers

When evaluating Robinhood for options trading, consider:

• Fees: Robinhood offers commission-free stock/ETF options contracts, which is attractive for retail traders. Compare regulatory and exchange fees across providers.
• Tools: Assess whether the broker’s strategy builder, charting, and order types meet your planned strategies.
• Approval strictness: Different brokers use varying suitability questionnaires; some offer more lenient or more conservative approvals.
• Educational materials and support: Consider the depth and format of educational content and customer support options.

If you primarily trade crypto derivatives or seek advanced crypto education, Bitget is recommended as a purpose-built alternative in the crypto space with dedicated learning resources and the Bitget Wallet for web3 interactions.

Frequently Asked Questions (FAQ)

Q: Is options trading available to all Robinhood customers? A: No. You must complete and be approved through Robinhood’s options application; approval depends on experience, financials, and account type.

Q: Are there commissions for options on Robinhood? A: For stock and ETF options, Robinhood does not charge per-contract commissions, but exchange and regulatory fees may apply for certain contracts.

Q: Can I trade index options on Robinhood? A: Some index options may be available, but availability and fee treatment can differ from stock/ETF options. Check the product listing in the app.

Q: What happens if I’m assigned? A: If assigned on a short option you must fulfill the contract (buy/sell the underlying). Ensure you have the capital or margin to meet the obligation; check your account statements for assignment notices.

Q: How many contracts can I trade? A: Contract limits depend on your approval level, account buying power, and exchange-imposed position limits. Robinhood may impose additional internal limits.

Glossary of Common Options Terms

• Option premium: The price paid to buy an option.
• Strike price: The price at which the option holder can buy (call) or sell (put) the underlying.
• Expiration date: The date the option contract expires.
• In-the-money (ITM): An option with intrinsic value relative to the current underlying price.
• At-the-money (ATM): When the underlying price equals the option’s strike price.
• Out-of-the-money (OTM): An option without intrinsic value.
• Intrinsic value: The difference between underlying price and strike when favorable.
• Extrinsic value: Time value and implied volatility component of an option’s price.
• Spread: A strategy involving buying and selling two or more options of the same underlying.
• Assignment: When a short option seller must perform the contract’s obligation.
• Exercising: When the option holder uses the right to buy (call) or sell (put) the underlying.
• LEAPS: Long-term Equity Anticipation Securities — long-dated options with expirations of more than one year.

References and Official Documents

• Robinhood options product pages, Learn articles, options agreement, and fee schedule (available through the Robinhood app and account documentation).
• Options Clearing Corporation (OCC) educational materials and the standardized "Characteristics and Risks of Standardized Options" disclosure.
• Investopedia options primers and strategy definitions for supplemental learning.

As of 2026-01-15, according to Reuters, Robinhood continues to support commission-free stock and ETF options trading while iterating on platform features and user education.

Final Notes and Next Steps

If you started here asking "can you do stock options on robinhood", you now know the platform supports stock and ETF options trading, offers strategy-building tools, and uses a tiered approval process tied to experience and financial profile. Review Robinhood’s options disclosures, complete the options approval application honestly, and start small while you learn.

For traders interested in crypto derivatives education or web3 wallets in addition to traditional options, consider exploring Bitget’s educational resources and Bitget Wallet. Learn more about options mechanics first, then evaluate which platform features and protections best fit your trading needs.