Robinhood lets you trade options on most stocks listed on major U.S. exchanges, but not all of them

Robinhood's options trading is available on stocks that meet certain liquidity and price requirements. The platform does not offer options on every stock — mainly those with lower trading volume, penny stocks, or very new listings. If a stock trades on the Nasdaq or New York Stock Exchange and has sufficient daily trading volume, options are usually available. The exact list changes as stocks are added or removed, so you should check Robinhood directly for the current status of any specific stock.

Options availability also depends on your account approval level. Robinhood has three levels of options trading approval, and each level unlocks different strategies. Level 1 allows covered calls and cash-secured puts. Level 2 adds spreads. Level 3 adds additional strategies. You must be approved for the level that matches the strategy you want to use, even if the stock itself supports options trading.

Key Takeaways

  • Robinhood offers options on most stocks listed on Nasdaq and NYSE, but excludes penny stocks, low-volume stocks, and very new listings.
  • Your account must be approved for options trading, and Robinhood has three approval levels that determine which strategies you can use.
  • You can search for any stock ticker on Robinhood to see whether options are available for that particular stock.
  • Options availability can change over time as stocks gain or lose trading volume, so a stock that does not have options today may have them later.

How Robinhood decides which stocks get options

Robinhood uses liquidity as the main filter. A stock must have enough daily trading volume and open interest in its options contracts for the market to function smoothly. Stocks with very low trading volume create wide bid-ask spreads, meaning the difference between what buyers will pay and what sellers will accept becomes large. This makes options expensive and risky to trade. Robinhood avoids listing options on these stocks to protect users from poor pricing.

Penny stocks — typically stocks trading below $5 per share — are almost never available for options on Robinhood. These stocks often have lower liquidity and higher volatility, which increases the risk. Stocks that have recently gone public may also lack options initially, even if they eventually meet Robinhood's standards. Over time, as a stock builds trading volume, Robinhood may add options for it.

How to check if a stock has options on Robinhood

Open the Robinhood app or website and search for the stock ticker. Once you land on the stock's page, look for an "Options" tab or section. If options are available, you will see a list of call and put contracts with different strike prices and expiration dates. If no options section appears, that stock does not currently have options trading available on Robinhood.

You can also filter by expiration date to see which time frames are offered. Most stocks with options have contracts expiring weekly, monthly, or quarterly. The number of available strike prices varies by stock — highly traded stocks typically have more choices.

Account approval levels and what they mean for your trades

Before you can trade any options on Robinhood, your account must be approved for options trading. Robinhood reviews your process based on your investment experience, income, and net worth. Approval is not automatic and can take several days.

Level 1 approval allows covered calls (selling calls against shares you own) and cash-secured puts (selling puts with cash set aside to buy shares if assigned). These are considered lower-risk strategies because you either own the underlying stock or have cash ready.

Level 2 approval adds spreads — strategies where you buy and sell options at the same time to limit both risk and profit. Spreads include call spreads, put spreads, and combinations.

Level 3 approval adds additional strategies beyond spreads, though Robinhood's exact offerings at this level vary. You must request approval for each level separately, and Robinhood may deny a higher-level request even if you have been approved for a lower level.

Stocks that typically do not have options on Robinhood

Penny stocks and over-the-counter (OTC) stocks do not have options on Robinhood. OTC stocks trade on pink sheets or other unregulated markets and lack the standardization required for options contracts. Stocks trading below $1 per share are also excluded.

Very new IPOs (initial public offerings) often lack options initially. Some companies choose not to list options even after they are may be able to access. Robinhood also excludes stocks from certain sectors or with regulatory restrictions, though these cases are rare. If you are unsure whether a stock has options, searching for it on Robinhood is the fastest way to find out.

What happens if a stock loses options availability

If a stock you hold options contracts on becomes unavailable for new trades, your existing contracts remain valid and can still be closed or exercised. You straightforward cannot open new positions. This is rare but can happen if a stock's trading volume drops significantly or if the company is delisted.

Robinhood will notify you if this occurs. You can still sell your existing contracts to close them, or hold them until expiration. The ability to close existing positions is protected even when new trades are blocked.

Frequently Asked Questions

Can I trade options on stocks outside the U.S.?

Robinhood's options trading is limited to U.S.-listed stocks on major exchanges like Nasdaq and NYSE. You cannot trade options on foreign stocks or international exchanges through Robinhood.

Do I need a certain account balance to trade options?

Robinhood does not enforce a minimum account balance for options trading itself, but you must have enough cash or buying power to cover the cost of the contracts you want to buy or the collateral required for selling strategies. Margin requirements vary by strategy.

What if I want to trade options on a stock that is not available on Robinhood?

You would need to use a different brokerage that offers options on that stock. Most major brokerages have wider options availability than Robinhood, though they may charge commissions or have different approval requirements.

Can my options approval level be downgraded?

Robinhood can review and downgrade your approval level if your account circumstances change significantly or if you violate the platform's rules. This is uncommon, but it is possible. You can also request a downgrade yourself if you want to restrict your trading.

How often does Robinhood add new stocks to its options list?

Robinhood adds stocks to its options offerings periodically as they meet liquidity thresholds, but there is no fixed schedule. You can check a stock's status by searching for it whenever you want to trade options on it.