Trading options has become one of the most popular strategies among retail traders, and Robinhood has made it easy to get started with just a few clicks. Whether you’re brand new to options or simply want to refine your approach, this in-depth guide will walk you through how to trade options on Robinhood in 2025, from account setup to placing your first trade.

Along the way, we’ll also cover how proper risk management can make you a better trader, why liquidity matters, and how to maximize profits while minimizing losses. Plus, for traders looking to build consistency and scale up, we’ll introduce you to exclusive deals on prop trading firms that can help you trade with larger accounts.

✅ Getting Started with Options on Robinhood

To begin trading options on Robinhood, you’ll need to:

  1. Enable Options Trading – Go to account settings and request approval. Robinhood will ask about your risk tolerance and trading experience to ensure you understand the basics.
  2. Search for a Stock – Use the magnifying glass icon to search for a ticker (e.g., Tesla, AAPL, SPY).
  3. Access Options Trading – Once approved, you’ll see a “Trade Options” button under the stock profile.

⚠️ Tip: Always confirm you are approved for options before attempting to trade.

📅 Understanding Option Expiration Dates

Every option has an expiration date, the deadline by which the contract must be exercised or closed. Choosing the right expiration date is crucial:

  • Short-term expirations (same-day or weeklies) → High risk, high reward. Best for experienced day traders.
  • Medium-term expirations (2 weeks – 2 months) → Balanced risk, ideal for swing traders.
  • Long-term expirations (6 months – 1 year, known as LEAPS) → Lower risk, more stability.

👉 For beginners, contracts at least 2 weeks out are generally safer, while advanced traders sometimes day trade contracts that expire the same day.

📈 Calls vs. Puts – The Basics

Options are contracts that give traders the right, but not the obligation, to buy or sell a stock:

  • Call Options – Profit if the stock price goes up.
  • Put Options – Profit if the stock price goes down.

💡 In-the-Money vs. Out-of-the-Money Contracts

When reviewing an options chain on Robinhood, you’ll see different strike prices:

  • In-the-Money (ITM) → Strike price is favorable compared to the stock’s current price. Safer, less volatile.
  • Out-of-the-Money (OTM) → Strike price is less favorable. Cheaper but riskier, with more volatility.

Example:

  • Tesla at $220
    • $210 Call = In-the-Money
    • $230 Call = Out-of-the-Money

⚖️ Risk Management Tools

One of the most overlooked parts of options trading is risk management. Robinhood doesn’t provide advanced tools like some brokers, but you can use:

  • Options Profit Calculators (free online tools) to simulate outcomes.
  • Limit Orders to control entry/exit price.
  • Stop-Loss Rules to protect your capital.

Remember: Always size your trades appropriately. Many traders lose money not because of strategy, but because they risk too much on a single trade.

🛒 Placing an Order on Robinhood

  1. Select Your Contract – Choose strike price and expiration.
  2. Choose Order Type:
    • Market Order – Fills instantly at available price.
    • Limit Order – Lets you set a max price you’re willing to pay.
  3. Review & Submit – Swipe to confirm the trade.

🔑 Pro Tip: Use limit orders to avoid overpaying due to the bid-ask spread.

🔄 Selling or Closing a Position

To exit a trade:

  1. Select your contract.
  2. Tap Trade → Sell.
  3. Choose limit or market order.

Liquidity is key here:

  • Volume → Contracts traded today.
  • Open Interest → Total number of active contracts.

If volume is low, your order may not get filled quickly.

🚀 Scaling Beyond Robinhood – Trade Like the Pros

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📝 Final Thoughts

Trading options on Robinhood in 2025 is simpler than ever, but success still comes down to:

  • Picking the right expirations.
  • Understanding calls vs. puts.
  • Managing risk carefully.
  • Using liquidity and spreads to your advantage.

For traders ready to level up, pairing your Robinhood education with a prop firm evaluation like Apex Trader Funding could be the key to trading with serious capital.

🔑 Key Takeaways:

  • Robinhood makes options trading beginner-friendly, but risk is real.
  • Always focus on risk management and liquidity before entering trades.
  • Scaling with prop firms can help you grow faster than trading a small account.

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⚠️ Disclaimer ⚠️

This content is provided for informational purposes only. Authors and contributors on our site are not certified or registered financial advisors. Before making any financial decisions, you should consult a financial professional. The discount codes and prop firm deals listed on this website are for informational purposes only. Before using any prop firm, please conduct your own research and due diligence. We do not endorse or guarantee any specific firm, and we are not responsible for any financial losses, disputes, or issues that may arise.

By using any discount code or signing up with a prop firm, you acknowledge that you are making an independent decision at your own risk. Please review each firm’s terms, conditions, and policies carefully before proceeding.

Trade responsibly!