Options let you bet on where a stock is headed with a fraction of the money it takes to buy shares outright. On Robinhood, placing that first trade is quick once you know the steps. It is also easy to lose money fast, so getting the setup right matters.
This guide walks through exactly how Robinhood options trading works in 2026: how to get approved, what each permission level lets you do, and how to place a trade the right way.
Get Approved for Options First
You cannot trade options on Robinhood until your account is approved. Robinhood grants options access through a short questionnaire that asks about your investing experience, income, net worth, and goals.
To turn it on, tap the profile icon, go to Investing, select Options trading, and tap Enable options trading. Answer the questions honestly, since your answers determine which level you get. Approval is usually fast, often within minutes. If you plan to run spreads, note that the top level also requires a margin account. Robinhood assigns a level from 1 to 3 based on your responses.
Robinhood
Robinhood
Robinhood is a trading platform that brings stocks, ETFs, options, futures, prediction markets, crypto, and retirement accounts together in one app.
Standout feature
One platform for stocks, ETFs, options, futures, prediction markets, and crypto
Fees
$0 commission on stocks, ETFs, and options.
Pros
Zero-commission trading on stocks, ETFs, and options
Cons
Best perks (high APY, lower margin rates) require Gold subscription ($5/month)
Robinhood's Options Levels Explained
Robinhood uses tiered permissions, and your level controls which strategies you can use.
- Level 1 allows covered calls and cash-secured puts. These are lower-risk, income-focused trades backed by stock you own or cash you set aside.
- Level 2 adds long options, meaning you can buy single-leg call options and put options to bet on a stock rising or falling.
- Level 3 unlocks multi-leg strategies like vertical spreads, calendar spreads, and iron condors. Getting Robinhood Level 3 options generally requires a margin account and more experience.
Most new traders start at Level 2, which covers the classic buy-a-call or buy-a-put trades. If your account cannot trade options yet, our guide on why you can't trade options on Robinhood covers the common fixes.
How to Place an Options Trade
Once approved, placing a trade takes about a minute. Here is the flow:
- Search the stock, ETF, or index you want to trade using the magnifying glass, then open its detail page.
- Tap Trade, then Trade Options. This opens the options chain.
- Choose Buy or Sell and Call or Put based on your view. Buy a call if you expect the price to rise, buy a put if you expect it to fall.
- Pick an expiration date. It appears just below the strategy; scroll right to see dates further out.
- Select a strike price. Strikes are listed high to low, and you scroll to find the one you want.
- Review the premium and number of contracts. Remember each contract controls 100 shares, so a $1.50 premium costs $150 per contract.
- Swipe up to submit. Your order goes to the market, and you can track it under your positions.
For a fuller beginner walkthrough, see our step-by-step guide on how to buy options on Robinhood.
Common Strategies by Level
Your first trades should match your level and comfort. A few common approaches:
- Buying calls (Level 2): profit if the stock rises above your strike plus the premium you paid. Your maximum loss is the premium.
- Buying puts (Level 2): profit if the stock falls. Useful for betting on a decline or hedging shares you own.
- Covered calls (Level 1): sell a call against 100 shares you own to collect income, capping your upside in exchange.
- Vertical spreads (Level 3): buy one option and sell another to lower your cost and define both your risk and reward.
Whatever strategy you choose, set an exit plan before you enter. Many traders use a stop loss on Robinhood options to cap the downside automatically.
If Robinhood Is Not the Right Fit
Robinhood keeps options trading simple, but simple is not for everyone. If you want a platform with more research context and a calmer interface, Public is the closest alternative. It offers options trading alongside stocks, ETFs, bonds, and crypto, and it is transparent about how order flow and pricing work. Our Public review breaks down the details if you want to compare before committing.
Public
Public
Investing for those who take it seriously. Invest in stocks, bonds, options, crypto & more.
Standout feature
A 5%+ yield Bond Account paired with 3.3% APY on cash — Public is one of the only consumer apps where idle and conservative money is treated as seriously as the equity portfolio.
Fees
Free
Pros
• Invest in stocks, bonds, crypto & more• Earn 3.3% APY* on your cash with no fees• 1% match when you transfer your portfolio• Lock in a 5%+ yield with a Bond Account
Cons
Customer support is in-app and email only, no phone
The Bottom Line
Robinhood options trading is approachable once you understand the levels and the order flow. Get approved, start at a level that matches your experience, and place small trades while you learn the mechanics. Options move fast and can expire worthless, so never risk money you cannot afford to lose.
For most people learning to trade, Robinhood is a low-cost place to start, with a clean interface and no commissions on options. Build your skills with single-leg trades before moving up to spreads. Options trading involves significant risk and is not right for everyone.
Robinhood
Robinhood
Robinhood is a trading platform that brings stocks, ETFs, options, futures, prediction markets, crypto, and retirement accounts together in one app.
Standout feature
One platform for stocks, ETFs, options, futures, prediction markets, and crypto
Fees
$0 commission on stocks, ETFs, and options.
Pros
Zero-commission trading on stocks, ETFs, and options
Cons
Best perks (high APY, lower margin rates) require Gold subscription ($5/month)
Frequently Asked Questions
Do I need to be approved to trade options on Robinhood?
Yes. You must complete a questionnaire and be approved for an options level before you can trade. Approval is usually granted within minutes and depends on your stated experience, income, and goals.
How much money do I need to start trading options on Robinhood?
There is no set minimum, and some contracts cost as little as a few dollars per share. Because each contract controls 100 shares, a premium of $0.50 costs $50. Start small while you learn.
What is the difference between Level 2 and Level 3 options?
Level 2 lets you buy single-leg calls and puts. Level 3 adds multi-leg strategies like spreads and iron condors, and it generally requires a margin account and more trading experience.
Can I lose more than I invest trading options on Robinhood?
Buying calls or puts caps your loss at the premium you paid. Some advanced multi-leg and margin strategies carry greater risk, so read Robinhood's options disclosures before using them.
