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How to Enable Options Trading on the Robinhood App

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Written by Timothy Sykes
Updated 8/29/2023 5 min read

You need to enable options trading on the Robinhood app before you start trading them. Robinhood does this to protect newer traders, as they’re more likely to experience big losses when options trading.

That’s no good for Robinhood either.

How do you start trading options on your Robinhood account? Read on to find out!

New to options trading? Learn more about the basics of options trading first.

How to Enable Options on Robinhood

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When you open a Robinhood account, options trading isn’t available right off the bat. You need to activate it first.

You’ll also need to meet certain eligibility requirements, ensuring you’re prepared for this advanced trading form.

This is a common broker practice, because advanced options strategies deal in higher levels of leverage. Your broker needs to trust that you know what you’re doing.

If you’re new to this, don’t worry; educational resources are available to help you get up to speed.

Here’s how to start accessing the options market on Robinhood’s mobile platform and website:

Step 1: Click “Account” on the App Home Screen

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First, log into your account and click the Account option on the home screen.

Step 2: Find the “Settings” Option in the Drop-Down Menu

In the Account menu, click on Settings.

Step 3: Navigate to “Options Trading” Tab in Account

You should see an Investing button inside your Settings page. If you’re not already signed up, you should see a Get Options Trading button. 

You’ll need to agree to an options trading agreement and risk disclosure.

Step 4: Press “Enable” if Options Are Available for Your Trading Account

Click on Get Options Trading. Then verify your credentials and answer the questions. These questions gauge your trading experience and knowledge, as well as your financial situation.

Click Accept when you’ve answered all the questions. Robinhood will review your answers and investment profile. They’ll contact you soon after. If you’re approved, you’ll be allowed to trade options on Robinhood.

Read this guide to options trading on Robinhood once you’re approved.

Why Can’t I Enable Option Trading on Robinhood?

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You likely can’t enable options trading on Robinhood because you don’t have enough experience. Robinhood reviews every request for options trading, just like other brokers.

Robinhood’s review process ensures that you have a sufficient balance and trading experience required for options trading.

Before enabling options, consider your investment objectives and risk tolerance to ensure it aligns with your trading goals.

The review process is a risk management measure. This helps online brokers protect beginner investors from losing money on options trades, and prevents the broker from losing money in the process too.

Need to redo your options trading questionnaire? Learn how options trading works before trying again.

Options Approval Levels

Robinhood has two levels of options trading approval.

After approval, you can select your preferred trading strategies based on the options approval level you’ve been granted. Be aware that there are restrictions on certain types of options trading depending on your approval level.

New options traders start at Level 2 and have access to basic options trading strategies. This is the lowest level for options transactions. Examples of basic options strategies include:

  • Covered calls
  • Covered puts
  • Long calls
  • Long puts

Level 3 approval gives access to complex strategies like:

  • Credit spreads
  • Debit spreads
  • Iron condors
  • Iron butterflies

How to Close Positions on Robinhood

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Once you’re actively trading options, it’s crucial to monitor your positions and track performance. If you run into any issues, don’t hesitate to contact customer support for assistance.

Closing a position means you’re selling an options contract to the market. Here’s how you do it on the Robinhood brokerage platform:

  1. Use the Search menu to find the stock you want to close the position on.
  2. Click on the stock to check its details.
  3. Tap the Trade menu on the stock details page.
  4. Choose Trade Option, then the Call Option button to sell your contracts.

Want to learn more about options? Sign up for my former student Mark Croock’s Evolved Trader program!

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity. Read More

* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”