Yes, you can trade options on Robinhood, but you need to request and be approved for options trading first
Robinhood does not turn on options trading by default. You have to request access through the app, and Robinhood will review your request based on your experience level and account details. Once approved, you can trade options contracts — which are bets on whether a stock price will go up, down, or stay within a range by a certain date. The approval process usually takes a few minutes to a few hours, though it can take longer if Robinhood needs more information from you.
Options trading carries real risk. You can lose money faster than you would buying and holding stock. Robinhood requires you to understand this before they grant access, which is why they ask about your trading experience and investment goals during the request process.
Key Takeaways
- You must request options trading permission in the Robinhood app under Account settings, and Robinhood will approve or deny based on your experience and account status.
- Robinhood offers four levels of options trading, from covered calls only (Level 1) to spreads and naked calls (Level 3), and you request the level you want.
- Your account must have at least $2,000 in cash or securities before Robinhood will approve any options trading.
- Once approved, you can trade options during regular market hours (9:30 a.m. to 4 p.m. Eastern) and during extended hours if you have that feature turned on.
- Options contracts expire on specific dates, usually Fridays, and Robinhood will close or exercise your position automatically if you do not act before expiration.
How to request options trading access
Open the Robinhood app and tap your profile icon in the bottom right. Go to Account, then scroll down to find "Options Trading" or "Investing." Tap "Request Options Trading" and select the level you want. Robinhood will show you a description of what each level allows you to do.
You will answer questions about your investment experience, how long you have been investing, and what you hope to do with options. Be honest — Robinhood uses these answers to decide whether to approve you and at what level. If you say you have never traded before and request Level 3 (the most advanced), Robinhood may deny you or approve you only for Level 1.
After you submit, Robinhood usually responds within minutes to a few hours. You will see the decision in the app. If you are denied, you can request again after 30 days.
The four levels of options trading on Robinhood
Robinhood sorts options trading into four levels. Each level unlocks more complex strategies, and each carries more risk.
| Level | What you can trade | Risk profile |
|---|---|---|
| Level 1 | Covered calls only. You own the stock and sell the right for someone else to buy it at a set price. | Lower risk. Your stock can be called away, but you own it already. |
| Level 2 | Long calls and puts. You buy the right to buy or sell stock at a set price by a certain date. | Moderate risk. You can lose the money you paid for the contract, but not more. |
| Level 3 | Spreads. You buy and sell options at different prices to reduce cost and risk. | Moderate to high risk. Spreads limit your loss but also your gain. |
| Level 4 | Naked calls and puts. You sell the right to buy or sell stock without owning it. | Highest risk. Your loss can be much larger than the money you received. |
Most new traders start with Level 1 or Level 2. Level 4 is rare and Robinhood approves it only for experienced traders with large accounts.
Account requirements before you can trade options
Your Robinhood account must have at least $2,000 in cash or securities combined. This is a Robinhood rule, not a federal rule, though the Securities and Exchange Commission (SEC) does require brokers to enforce a $2,000 minimum for options accounts.
If your account drops below $2,000 after you are approved, Robinhood will not take away your options access, but you will not be able to open new positions. You can still close existing ones.
Your account must also be in good standing — no pending transfers, no account restrictions, and no history of violating Robinhood's terms. If you have been flagged for pattern day trading (buying and selling the same security more than four times in five business days), you may still trade options, but the rules around day trading still apply.
How options contracts work on Robinhood
An options contract is a bet on a stock price. A call is a bet that the price will go up. A put is a bet that the price will go down. Each contract covers 100 shares of the stock.
When you buy a call on Apple stock expiring in two weeks at a strike price of $150, you are paying for the right to buy 100 shares of Apple at $150 per share anytime before the expiration date. If Apple stock rises to $160, your contract is worth money — you can sell it or exercise it (buy the shares at $150 and sell them at $160). If Apple stays below $150, your contract expires worthless and you lose the money you paid.
Robinhood shows you the price of each contract in the app. Prices change throughout the day as the stock price moves and as the expiration date gets closer. You can close a position (sell the contract back) anytime during market hours, even if you bought it just minutes before.
Expiration dates and what happens if you do not act
Options contracts expire on specific dates, usually the third Friday of each month. Some stocks have weekly expirations too. As the expiration date approaches, the contract loses value if it is out of the money (the bet did not work out).
On the expiration date, Robinhood will automatically close or exercise your position. If you own a call that is in the money (the stock price is above the strike price), Robinhood will exercise it — you will buy the shares at the strike price. If you own a call that is out of the money, it expires worthless and you lose your investment. If you sold a call (covered call), and it is in the money, the shares will be called away from you.
You do not have to wait for expiration. You can close any position anytime during market hours by selling the contract back. This is the most common move because it lets you lock in a profit or cut a loss before expiration.
Trading hours and fees for options on Robinhood
You can trade options during regular market hours: 9:30 a.m. to 4 p.m. Eastern, Monday through Friday. If you have extended hours turned on in your Robinhood account, you can also trade options during pre-market (4 a.m. to 9:30 a.m.) and after-hours (4 p.m. to 8 p.m.) sessions, though liquidity is lower and prices can be wider.
Robinhood does not charge a commission to buy or sell options contracts. You pay the bid-ask spread — the difference between what buyers are willing to pay and what sellers are asking. On liquid stocks, this spread is small (a few cents). On less-traded stocks or far-out expiration dates, the spread can be wider, which costs you more.
If you exercise an option (buy or sell the underlying shares), you will owe the cost of those shares. If you exercise a call to buy 100 shares at $150 each, that is $15,000 out of your account. Robinhood will reject the exercise if you do not have enough cash.
Frequently Asked Questions
What happens if I do not have enough money to exercise an option?
Robinhood will not let you exercise if your account does not have enough cash. If you own a call that is in the money at expiration and you do not have the cash to buy the shares, Robinhood will sell the contract instead to close your position. You keep any profit from the sale.
Can I trade options on stocks I do not own?
It depends on your approval level. At Level 1, you can only sell covered calls (calls on stock you already own). At Level 2 and above, you can buy calls and puts on any stock, even if you do not own it. You cannot sell naked calls or puts unless you have Level 4 approval.
Do I have to pay taxes on options profits?
Yes. Short-term capital gains (options held less than one year) are taxed as ordinary income. Long-term gains (held over one year) get a lower rate. Robinhood sends you a 1099 form at tax time with all your trades. Keep your own records too.
What if Robinhood denies my options request?
Robinhood will tell you why in the app. Common reasons are insufficient account balance, too little trading experience, or requesting a level that does not match your experience. You can request again after 30 days, or you can contact Robinhood support to ask what you need to do to be approved next time.
Can I trade options on fractional shares?
No. Options contracts always cover 100 whole shares. You cannot buy a call on 50 shares or 0.5 shares. Each contract is 100 shares, and the price shown in the app is per share, so you multiply by 100 to get the total cost.