Trading Options in Robinhood

Posted on Sat 04 July 2020 in Stocks

Trading options has always seemed like a way to magnify your earnings potential; it allows you to trade more with the money you have available, as opposed to simply buying stocks. I have a Robinhood account but have never put in the effort to learn, until now.

It turns out that it’s pretty easy! This article shows how to do so - basically click into a stock and hit the “trade options” button.

More interesting is this article on investing strategies. In essence, calls are bets that the stock will go up, puts are bets that the stock will go down, strike price is what you’ll buy the stock for when you exercise that option, and expiration date is when your option will expire.

There are options within these that are interesting - i.e. buying both a put and a call assuming that the stock is going to move drastically in some direction, buying a call and selling a call caps the maximum amount of losses, etc. The link has more in detail strategies, but this is enough for me to get started.