Robinhood for Options: Account Setup, Approval Levels, and Your First Trade

Robinhood is the app-first broker that made commission-free trading standard, and its options offering is deliberately narrow: stock and ETF options with no per-contract fees, two approval levels, and no naked options. This guide covers the practical setup: opening an account, getting approved, funding it, placing a first trade, and what it costs.

Opening an account

Opening a Robinhood brokerage account is a short, fully online application. On Robinhood's own application pages the company states there are no minimum deposit amounts to open an account, and there are no fees to put money in or take money out. You can start the application in the Robinhood mobile app (iOS and Android) or on the Robinhood website.

Like every U.S. broker, Robinhood is required by federal law to verify your identity. Have these details ready: your full legal name, a valid Social Security number, date of birth, a U.S. residential address (all 50 states plus Puerto Rico are covered), and your employment status. You must be 18 or older. Most applicants are approved within minutes, but if Robinhood needs extra documentation — for example a photo of your ID — verification can take a few business days. You do not have to fund the account the same day you open it; you can link a bank account later and transfer cash when you are ready.

Once open, you will have access to the Robinhood mobile app and to Robinhood Legend, the company's browser-based desktop trading platform, which is free for all customers. Both let you trade options; the phone app is simpler, and Legend shows more of the chain at once.

Getting approved for options

Options trading on Robinhood is gated behind approval levels that are set by a short questionnaire about your experience, income, net worth, and investment objectives. Robinhood reviews these answers and decides which strategies you can trade. This is where beginners most often get stuck, so here is exactly how the tiers work, based on Robinhood's own descriptions.

Level 2: basic options strategies

Level 2 permits buying calls and puts, and selling covered calls and covered puts — a cash-secured put is a covered put backed by cash rather than stock. This is where most people start: it covers the single-leg strategies most beginners learn first. Note that Robinhood's levels start at 2; there is no Level 1 in its options program — that is simply how the company named them.

Level 3: advanced strategies

Level 3 permits fixed-risk spreads — strategies like credit spreads and iron condors — and other advanced multi-leg strategies. Each leg of a spread is a separate contract, and the risk is bounded by how the legs are paired. Level 3 is the highest options approval Robinhood offers: uncovered (naked) options are not available on Robinhood at any level.

Robinhood generally approves Level 3 on margin accounts, so if your account is set up as cash-only that can be a snag — check with Robinhood about eligibility or about converting your account type before you apply for the upgrade.

How to apply and upgrade

To apply, look in your account settings for the options enrollment flow — wording such as "Enable options trading" (menu paths change over time, so search settings if you cannot find it). Answer the questionnaire honestly. Approval is often immediate, though some applications take longer to review. If you are approved for Level 2 and later want Level 3, you can reapply or request an upgrade once you have some options trading experience under your belt. One firm rule: do not inflate your experience answers to unlock a higher level. The questionnaire exists because these products can lose more than the premium you collect in some configurations. The level is a guardrail, not a gate to beat.

Funding your account

Link a bank account from the app — Robinhood supports instant bank verification and micro-deposits — and move money in by ACH transfer, which is free. Robinhood offers instant deposits that let you invest incoming money right away up to a limit, but do not assume every dollar is available for options: check the buying-power and funds-status displays in the app before placing an order, since options orders may need settled funds. Link your bank before you plan to trade — a fresh link plus a fresh transfer can both add waiting time on day one.

Placing your first options trade

In the Robinhood mobile app, open any optionable stock and tap Trade, then Trade Options. That opens the option chain — the menu of every available contract.

The chain is organized by expiration date, which runs across the top: pick the date your plan calls for. Under each date you will see calls and puts listed by strike price. The mobile chain shows one side at a time with a calls/puts toggle; Robinhood Legend shows a fuller two-sided chain. For each contract you can see the premium (quoted per share — multiply by 100 to get the contract's dollar cost), the bid and ask, volume, open interest, and Robinhood's own breakeven and percent-change figures.

When you are ready, tap a contract to open the order ticket. The basics work like this:

1. Choose whether you are buying or selling the contract, and whether this is an opening trade or a closing trade.
2. Enter how many contracts you want.
3. Set a limit price. This is the maximum you will pay (or minimum you will accept when selling). The ticket shows the live bid/ask so you can place your limit somewhere sensible, plus an estimated total cost or credit.
4. Review everything on the confirmation screen and submit.

Always use limit orders for options. The spread between the bid and ask is real money, and a market order can fill at a worse price than you expected — especially in less liquid contracts, where liquidity is thin and spreads widen. Stock and ETF options trade during regular market hours, so an order placed after hours waits for the open. If your limit does not fill, that is information: the market was not willing to meet your price, and chasing it rarely ends well.

What it costs

Robinhood's published fee schedule states that investing with a Robinhood account is commission-free for stocks, ETFs, and their options, and that Robinhood does not charge fees to open or maintain an account. On stock and ETF options, Robinhood charges no base commission and no per-contract commission of its own. That is the real cost differentiator: brokers that charge per-contract fees make frequent trading expensive for small accounts, while on Robinhood that line item is zero.

What you do still pay are small regulatory pass-through fees that apply at every U.S. broker. Robinhood's fee page lists a consolidated audit trail fee of $0.0003 per options contract (rounded to the nearest penny, with anything under a penny rounded down to zero), plus FINRA's trading activity fee and options regulatory fees on sell orders (around four cents per contract combined). On a typical small trade, these are a few cents at most.

The exception is index options, which do carry a Robinhood contract fee: $0.50 per contract without a Gold subscription, or $0.35 per contract for Gold subscribers, on top of exchange fees that vary by index symbol. Futures are priced separately (currently $0.75 per contract). If you trade anything besides plain stock and ETF options, check Robinhood's current published fee schedule for the exact numbers — they change.

The honest fine print

Options are leveraged contracts and the risks are real. A bought option can expire worthless and you lose the entire premium. A sold put obligates you to buy the stock at the strike price if assigned — which is why cash-secured puts require the cash to be there. Selling a call you do not have shares to cover can produce losses far beyond the premium you collected. None of this is financial advice: it is mechanics, and understanding the mechanics is the prerequisite for everything else.

Also remember that brokers change fees, approval rules, and platform layouts over time. Before you act on anything in this article, check Robinhood's current pages for the latest figures and requirements — the fee schedule and support articles on robinhood.com are the source of truth.