# How To Trade Options On Robinhood For Beginners (2026) Source: https://www.youtube.com/watch?v=me3iN1GsD3g Recap page: https://rapidrecap.app/video/me3iN1GsD3g Generated: 2026-01-27T23:03:35.285+00:00 --- ## Quick Overview The video provides a beginner's tutorial on how to trade options using the Robinhood app, focusing on the fundamental concepts of call and put options, and demonstrating how to enable Level 2 options trading access. **Key Points:** - The video serves as a beginner's guide to trading options on Robinhood, emphasizing that options involve significant risk and are not suitable for all investors. - Options contracts control 100 shares of an underlying asset and have an expiration date, unlike traditional stock ownership. - To trade options, users must enable Level 2 permissions in the Robinhood app settings by navigating through the profile menu and selecting 'Investing'. - Call options represent a bullish bet, giving the buyer the right (but not the obligation) to buy the stock at a fixed price before expiration. - Put options represent a bearish bet, giving the buyer the right (but not the obligation) to sell the stock at a fixed price before expiration. - The cost of an option contract is called the option premium, which is multiplied by 100 to determine the total cost for one contract. - The presenter encourages viewers to use Robinhood's Paper Trading simulator (via WeBull, though the video focuses on Robinhood's functionality) to practice risk-free. ![Screenshot at 00:06: The screen displays the Robinhood Options Strategy Builder interface for NVDA, showing basic single-leg options strategies like Long Call, Covered Call, Long Put, and Cash-Secured Put, which are available after enabling Level 2 permissions.](https://ss.rapidrecap.app/screens/me3iN1GsD3g/00-00-06.jpg) **Context:** This tutorial, titled "How To Trade Options On Robinhood For Beginners (2026)", walks new investors through the initial steps required to begin trading options on the Robinhood platform. The presenter stresses the inherent high risk associated with options, noting that an investor can lose 100% of their investment if the trade expires worthless. The tutorial specifically demonstrates how to navigate the app to enable advanced options trading permissions, which is a prerequisite for executing strategies beyond basic single-leg options. ## Detailed Analysis The presenter begins by issuing a strong warning that options trading involves significant risk, up to losing 100% of the invested capital, and is not appropriate for every investor. He explains that unlike stocks, options are financial contracts tied to an underlying asset with a specific expiration date. To access more complex options trading on Robinhood, users must first enable Level 2 permissions. This is done by accessing the profile icon, tapping the menu (three lines in the top left), selecting 'Investing,' and then finding the 'Options trading' section where Level 2 must be enabled. Once enabled, the presenter demonstrates the Option Strategy Builder interface, showing basic 'Single Leg' strategies (Long Call, Covered Call, Long Put, Cash-Secured Put) and more complex multi-legged strategies like Spreads and Straddles. He then switches to the actual options chain for NVDA (NVIDIA) for the March 20th expiration date, highlighting that contracts with strike prices above the current share price ($184.80 at that time) are 'out of the money' calls, and contracts below the share price are 'in the money' puts. He explains that the premium paid for an option (e.g., the $6.90 premium for the $200 Call) is multiplied by 100 to get the total cost, which is the maximum loss. The maximum profit for buying a call is theoretically unlimited if the stock rises significantly above the strike price plus premium. Conversely, buying a put option provides the right to sell at a fixed price. The presenter strongly recommends using a paper trading simulator, such as the one offered by WeBull (though he is demonstrating Robinhood), to practice before committing real money, due to the high volatility and complexity of options pricing. ### Options Trading Disclaimer - Options involve significant risk and are not suitable for all investors - Contracts control 100 shares and have an expiration date - Max loss when buying an option is the premium paid. ### Enabling Level 2 Access - Navigate to Profile > Menu (top left) > Investing > Scroll to Options Trading > Enable Level 2 access to unlock advanced strategies. ### Single Leg Strategies Overview - The Strategy Builder shows fundamental single-leg options: Long Call (bullish), Covered Call (bullish), Long Put (bearish), and Cash-Secured Put. ### Call Options Explained (Bullish) - Buying a call gives the right, but not the obligation, to buy the underlying stock at a fixed strike price before expiration; profit is theoretically unlimited if the stock rises above the strike price plus premium. ### Put Options Explained (Bearish) - Buying a put gives the right, but not the obligation, to sell the underlying stock at a fixed strike price before expiration; profit is maximized if the stock drops below the strike price minus the premium. ### Contract Details (NVDA Example) - For the $200 Call expiring 3/20, the premium was $6.90, costing $690 total ($6.90 * 100 shares). The max loss is the premium paid ($690), and max profit is unlimited. ### Recommendation - Practice using paper trading simulators (like WeBull's) before trading real money due to the volatility and complexity of options pricing. ![Screenshot at 00:02: The Robinhood logo appears over a stock chart, setting the context for trading options on the platform.](https://ss.rapidrecap.app/screens/me3iN1GsD3g/00-00-02.jpg) ![Screenshot at 00:07: The Robinhood Options Strategy Builder is shown, displaying fundamental single-leg strategies like Long Call and Covered Call.](https://ss.rapidrecap.app/screens/me3iN1GsD3g/00-00-07.jpg) ![Screenshot at 01:04: A promotional graphic appears encouraging viewers to use RyanScribner.com/robinhood to sign up and receive a free fractional share bonus.](https://ss.rapidrecap.app/screens/me3iN1GsD3g/00-01-04.jpg) ![Screenshot at 01:34: The presenter navigates to the profile icon in the bottom right corner of the Robinhood app menu.](https://ss.rapidrecap.app/screens/me3iN1GsD3g/00-01-34.jpg) ![Screenshot at 09:47: The order screen for buying an NVDA $200 Put shows key statistics including bid/ask prices, chance of profit \(44.21%\), and The Greeks \(Delta, Gamma, Theta\).](https://ss.rapidrecap.app/screens/me3iN1GsD3g/00-09-47.jpg)