Robinhood lets you trade options on most stocks, but not all of them

You can trade options on any stock that Robinhood lists for regular stock trading, with a few exceptions. The main limit is not the stock itself but your account: Robinhood requires you to be approved for options trading, and that approval level determines which strategies you can use. A stock like Apple or Tesla will have options available, but a penny stock or a newly listed company might not.

The real constraint is liquidity. Robinhood only shows options contracts that have active buyers and sellers. If a stock is too small or too new, there may be no options market for it at all. You can search for any stock in the Robinhood app and see whether options are available — if the options tab appears, contracts exist for that stock.

Key Takeaways

  • Options are available on stocks that trade on major U.S. exchanges and have enough trading volume to support an options market.
  • Robinhood requires a separate approval process for options trading, and your approval level limits which strategies you can execute.
  • Penny stocks, OTC stocks, and very new listings typically do not have options available because there is no active market for them.
  • You can check whether a stock has options by searching for it in the Robinhood app — the options tab will appear only if contracts exist.

How Robinhood's options approval levels work

Robinhood has four approval levels for options trading, and each one unlocks different strategies. Level 1 allows covered calls and cash-secured puts — the most conservative approaches. Level 2 adds spreads and other multi-leg strategies. Level 3 allows short calls and puts without collateral backing them. Level 4 is for experienced traders and includes complex strategies like iron condors.

Your approval level does not change which stocks have options available. Instead, it changes what you are allowed to do with them. A Level 1 account can see options on Apple, but only execute covered calls or cash-secured puts. A Level 3 account can sell naked calls on the same stock. Robinhood assigns your level based on your trading experience, account size, and answers to their questionnaire when you request options trading.

Stocks that do not have options available

Penny stocks — shares trading under $5 — rarely have options. The same is true for stocks trading over-the-counter (OTC), which are not listed on the Nasdaq or New York Stock Exchange. Very new IPOs sometimes lack options for their first weeks or months, until the market builds enough volume to support options contracts.

International stocks and ADRs (American Depositary Receipts) may or may not have options. Robinhood does not offer options on any cryptocurrency, even though you can buy and hold crypto through the app. If you search for a stock and no options tab appears, that stock simply does not have an options market active on any exchange.

How to learn about a specific stock has options

Open the Robinhood app and search for the stock by ticker or company name. If options are available, you will see an "Options" tab next to the stock price and chart. Tap that tab to see the available contracts — usually calls and puts at multiple strike prices and expiration dates.

If there is no options tab, that stock does not have options trading available. This does not mean options will never exist for that stock; it means there is no active market for them right now. Stocks that grow in size and volume sometimes gain options markets over time.

Why some stocks lack options even though they are large

The decision to create an options market for a stock is made by the exchanges and options clearing houses, not by Robinhood. They consider factors like trading volume, share price stability, and market demand. A large company with low trading volume might not have options. A smaller company with very high volume might.

Robinhood cannot create options for a stock if no options market exists. The app only shows you contracts that trade on the major options exchanges — the CBOE, ISE, EDGX, and others. If none of those exchanges list options for a stock, Robinhood cannot offer them either.

Options availability on index funds and ETFs

Many ETFs and index funds have options available through Robinhood, especially the large ones like SPY, QQQ, and IWM. These tend to have very active options markets because they are popular with traders. Smaller or newer ETFs may not have options, just like smaller stocks.

The same search method applies: look for the options tab in the app. If it appears, you can trade options on that ETF. If not, no options market exists for it yet.

What happens if you want options on a stock that does not have them

Your only real option is to wait. If a stock grows in trading volume, an options market may eventually develop. You can also contact Robinhood support to ask whether options are planned for a specific stock, though they cannot may provide when or if that will happen.

Some traders move to other brokers that specialize in options or that have access to more niche markets. Robinhood focuses on high-volume, liquid stocks, which is why most major U.S. stocks have options available but smaller or newer ones do not.

Frequently Asked Questions

Can I trade options on stocks I cannot buy on Robinhood?

No. If Robinhood does not list a stock for regular trading, you cannot trade options on it either. The stock must be available to buy and hold before options become available.

Do I need a certain account balance to trade options on a stock?

Robinhood does not set a minimum balance for options trading itself, but certain strategies require collateral. A cash-secured put requires cash equal to the strike price times 100. A covered call requires you to own 100 shares of the stock. Your account balance and holdings determine which strategies you can actually execute.

Why does a stock I own not have options available?

The stock is likely too small, too new, or trades too infrequently for an options market to exist. Exchanges create options markets only when there is enough demand and volume to support active trading. You can hold the stock indefinitely, but you cannot trade options on it unless that changes.

If a stock gains options, will I be notified?

Robinhood does not send notifications when options become available for a stock. You would need to check the app yourself by searching for the stock and looking for the options tab.