Yes, you can trade options on Robinhood, but you need to request and receive approval first
Robinhood lets you trade options contracts, but the platform does not turn on options trading automatically. You have to request access through your account settings, and Robinhood will review your request and assign you an approval level. The approval process is not when ready — it can take a few minutes to a few days depending on your account history and answers to their questions.
Once approved, you can place options trades during market hours just like you would buy or sell a stock. The mechanics are the same: you search for the underlying stock, select the contract you want (by expiration date and strike price), and enter your order. Robinhood shows you the bid and ask prices in real time, and your order fills when a buyer or seller on the other side matches your price.
Key Takeaways
- You must request options trading permission in your Robinhood account settings before you can place any options trade.
- Robinhood assigns you one of four approval levels, and your level determines which types of options strategies you can use.
- Level 1 approval lets you buy call and put contracts; higher levels unlock selling and more complex strategies.
- Options trades settle in one business day, and you can close a position before expiration by selling the contract back.
How to request options trading permission
Open the Robinhood app or website and go to your Account settings. Look for the section labeled "Options" or "Investing" — the exact name varies slightly between the app and web version. Tap or click "Request Options Trading" or a similar button.
Robinhood will ask you a series of questions about your investment experience, income, and net worth. These questions determine which approval level you receive. Answer honestly: Robinhood uses your answers to decide what strategies you are allowed to use, not to block you from trading options entirely. Even if you have no experience, you can still receive Level 1 approval, which covers the most basic options trades.
After you submit your answers, Robinhood reviews your account. You will see a notification in the app when a decision is made. Most approvals come through within a few minutes, though some accounts take longer if Robinhood needs more information.
Understanding the four approval levels
Robinhood uses a four-level system to control which options strategies you can use. Your approval level depends on your experience and the answers you gave during the request process.
| Level | What You Can Do |
|---|---|
| Level 1 | Buy calls and puts only. You cannot sell options. |
| Level 2 | Buy and sell calls and puts. Covered calls and cash-secured puts allowed. |
| Level 3 | Spreads, straddles, and other multi-leg strategies. Selling naked calls and puts. |
| Level 4 | All strategies, including margin-based positions and complex spreads. |
Most new traders start at Level 1 or Level 2. You can request a higher approval level later by going back to your account settings and updating your information. Robinhood will review the request and either grant it or explain why they cannot.
How to place an options trade on Robinhood
Once you have approval, trading options works much like buying a stock. Tap the search icon in the app, type the stock symbol, and select it. Scroll down to the "Options" section and you will see a list of available contracts organized by expiration date.
Each row shows a call and a put for the same strike price and expiration. The columns show the bid price (what buyers will pay), the ask price (what sellers want), and other details like the Greeks (delta, gamma, theta, vega) if you want to see them. Tap the contract you want to trade.
A new screen opens showing the bid-ask spread and a quantity selector. Choose how many contracts you want to buy or sell — one contract represents 100 shares of the underlying stock. Enter your order type (market order, limit order, or stop order) and review the total cost or credit. Tap "Review" and then "Confirm" to send the order.
Your order goes to the market when ready. If you placed a market order, it will fill as soon as a matching seller or buyer is found, usually within seconds. If you placed a limit order, it will wait until the price reaches your limit or until market close.
What happens when you close or hold an options position
You do not have to hold an options contract until expiration. You can close the position at any time during market hours by selling the contract back. Open your Positions tab, find the options contract, and tap "Sell" or "Close." Robinhood will show you the current bid and ask prices, and you can place a market or limit order to exit.
If you do hold a contract until expiration, Robinhood will handle the settlement automatically. If your call or put is in the money (profitable), Robinhood will exercise it for you and deposit the shares or cash into your account. If it is out of the money (worthless), the contract straightforward expires and disappears from your account.
Options trades settle in one business day, meaning the cash or shares move into your account the next trading day. You can use the proceeds to place new trades when ready, but the settled amount does not count toward your buying power until the settlement is complete.
Margin requirements and buying power for options
Buying options contracts uses cash from your account, just like buying stock. If you buy one call contract for $2.50 per share, you pay $250 (100 shares × $2.50) from your buying power. Robinhood deducts this amount when ready when your order fills.
Selling options (if you have Level 2 approval or higher) requires margin. Robinhood holds a portion of your account value as collateral to cover the risk if the trade moves against you. The amount varies by strategy: a covered call requires less margin than a naked put because the covered call is backed by shares you already own. Robinhood displays the margin requirement before you confirm the trade.
If your account balance falls below the margin requirement, Robinhood may close positions automatically to bring you back into compliance. This is called a margin call. You can avoid this by keeping cash in your account and not overleveraging your positions.
Fees and costs for options trading on Robinhood
Robinhood does not charge a commission per trade for options, just as it does not for stocks. You pay only the bid-ask spread — the difference between what a buyer will pay and what a seller wants. On liquid options (those with high trading volume), the spread is usually small, a few cents per contract. On less liquid options, the spread can be wider and cost you more.
If you hold an options contract past expiration and Robinhood exercises it, there is no additional fee. If you close a position early, you pay only the spread on the closing trade, not a separate commission.
Frequently Asked Questions
How long does it take to get options trading approval?
Most approvals come through within minutes to a few hours. Some accounts take a day or two if Robinhood needs to review additional information. You will see a notification in the app when your request is approved or denied.
Can I trade options on a Robinhood account with less than $2,000?
Yes. The $2,000 minimum applies to day trading stocks, not to options. You can trade options with any account balance, though your buying power limits how many contracts you can buy at once.
What happens if I do not close an options contract before it expires?
Robinhood will exercise the contract automatically if it is in the money. You will receive the shares (for a call) or the cash (for a put) in your account the next business day. If the contract is out of the money, it expires worthless and you lose the premium you paid.
Can I sell options without owning the underlying stock?
It depends on your approval level. Level 2 lets you sell covered calls (only if you own the stock) and cash-secured puts (you must have cash set aside). Level 3 and above let you sell naked calls and puts without owning the stock or holding cash, though this carries higher risk.
Do options trades settle the same day on Robinhood?
No. Options settle in one business day, like stock trades. The cash or shares move into your account the next trading day, but you can use the proceeds to place new trades when ready.