---
title: 'How to Trade Options on Robinhood for Beginners (2026)'
source: 'https://youtube.com/watch?v=me3iN1GsD3g'
video_id: 'me3iN1GsD3g'
date: 2026-07-27
duration_sec: 828
---

# How to Trade Options on Robinhood for Beginners (2026)

> Source: [How to Trade Options on Robinhood for Beginners (2026)](https://youtube.com/watch?v=me3iN1GsD3g)

## Summary

This video is a beginner's guide to trading options on Robinhood, covering the basics of call and put options, how to enable options trading, place trades, and understand key concepts like expiration, strike price, and premium. It emphasizes the risks and recommends practicing with a simulator before using real money.

### Key Points

- **Video Overview** [00:01] — The video breaks down popular options types, strategies, and how to place a trade on Robinhood for beginners.
- **Risk Disclaimer** [00:15] — Options trading involves significant risk; you could lose up to 100% of your investment. The video is for educational purposes only.
- **Enabling Options Trading** [01:25] — To enable options, click the person icon, then the three lines, then investing, and scroll to options trading. Level 2 is sufficient for beginners.
- **Stocks vs Options** [03:43] — Stocks can be held forever (unless bankruptcy), while options have an expiration date and can become worthless. Options are derivatives controlling 100 shares per contract.
- **Call Options Explained** [05:19] — Call options give the right to buy a stock at a fixed price before expiration. They are bullish bets. In-the-money calls have strike below current price.
- **Put Options Explained** [07:46] — Put options give the right to sell a stock at a fixed price before expiration. They are bearish bets. In-the-money puts have strike above current price.
- **Bid/Ask and Premium** [10:02] — The option premium is per share; multiply by 100 for contract cost. Bid and ask prices fluctuate based on supply and demand.
- **Limit Orders Recommended** [12:14] — Options are less liquid, so use limit orders to specify price. Market orders can result in unfavorable fills due to bid-ask spread.

### Conclusion

Options trading offers leverage but carries significant risk of total loss. Beginners should use paper trading simulators to practice before investing real money.

## Transcript

If you're looking to trade options on Robin Hood in 2026, this video is going to break down the most popular types of options for beginners, some options strategies, how to place a trade, and more. Now, I've been using
Robin Hood for close to a decade now, talking about them here on YouTube and over on my blog, investingssimple.com. So, I'll be sharing all of that experience here with you. And all that I ask in return is that you drop a like
and subscribe. Real quick before we dive in, I just have to mention that options trading involves significant risk and is not suitable for all investors. You could lose some to all up to 100% of the money that you invest. And this video is
not financial advice. But my goal with this video is to educate you about why these risks are present and what makes options different from other forms of investing. With that said, let's dive into my Robin Hood account. Now, for
starters, guys, if you don't have a Robin Hood account yet, be sure to click the top link in the description below or visit ryanoscriber.com/roinhood. You'll get a free fractional share worth up to $200 when you open and fund a new
account. And this helps to support my channel. So, thank you. I also have a full Robin Hood tutorial that I'll put in the corner if you want to familiarize yourself with the app before diving into options. Now, I already have options
trading enabled on my Robin Hood account for demo purposes, but if you don't, here's the steps you would follow to enable this. For starters, you're going to click on the person icon in the bottom right, followed by the three
lines in the top left, and then you're going to click on this investing section here. At this point, all you have to do is scroll down and look for the options trading section of the app. And as you can see, I have level two options
enabled. If you click on this, it's going to show you what level two options enable you to do. [music] And this is plenty for beginners, but if you wanted to, you could also request to upgrade to a higher level, allowing for more
advanced strategies. But basically, you navigate to this section of the app if you're looking to enable options trading within your Robin Hood account. So, once you have options enabled, let's talk about where you will find them in the
Robin Hood app. They're not in a separate section of the app or anything like that. So, what you would do instead is actually search for a stock first. To go with Nvidia since this is one of the most popular stocks among investors. So,
the search icon. We're going to click into the search bar and we're going to type in the symbol for Nvidia and then select that here at the top. And this brings up the main stock profile page. From here, you're going to click on the
trade button and then select trade options. And this brings us into the options trading section of the Robin Hood app. Now, Robin Hood has this option strategy builder where you can basically click on these different icons
and get ideas about options strategies that you could follow, but this is actually above and beyond the scope of this beginner video. So, we're just going to be focusing on the two most popular types of options. So, what we're
scroll through these dates listed here at the top, which are going to be expiration dates for options contracts. As you can see, there's a lot of them here for the rest of 2026. But if you go all the way to the end, we can also see
expiration dates in 2027 as well as 2028. So, before we click into one of these expiration dates, let's explain what exactly these mean. And the best way to understand options is to first understand how stocks or equities work.
When you invest in a stock, you can hold on to those shares forever. The shares do not expire and the only thing that could potentially happen is that the company goes bankrupt and the shares get extinguished. Bankruptcy is virtually
the only way to lose 100% of your investment with traditional long stock investments. Options, on the other hand, are like owning shares of a stock that have an expiration date. At a certain point, the investment is guaranteed to
become 100% worthless if it's not sold or exercised. Circling back to stocks, options are different from traditional equity investments, and that's because these are financial contracts. The
technical term for these is derivatives, and that means that the price is determined by an underlying asset. When you buy one stock, you own one share of the company. It's pretty straightforward. Options are different
because each options contract puts you in control of 100 shares. This gives you something called leverage, which basically means whatever happens to the price of the underlying asset will be magnified in terms of what you own. So
between this leverage and expiration date, this makes options extremely volatile, which means major price swings are to be expected. There's a few more basics to cover, but let's actually dive into one of these expiration dates now
as we cover those details. We're going to take a look at the March 20th you've gotten any value out of this video so far, make sure you subscribe. top, you have the choice to either buy or sell. And to the right of that, you
can either choose call or put. We're going to be covering call and put options because these are the two most popular options types among investors. For starters, buying call options means [music] placing a bullish bet on a
potentially make money if the underlying asset went up in value. Specifically, a call option gives you the right, but not the obligation to buy a stock at a fixed
price before a set expiration date. So, let's take a look at some of these Nvidia call options that are expiring on March 20th of 2026. In the middle of the screen, you'll notice a gray line that represents the current share price of
Nvidia. Any contracts below that line are considered to be in the money, which basically means the strike price or the price that you could buy at is lower than the current share price. Basically, that means that you could exercise that
option and buy those 100 shares associated with each contract and benefit from the price difference. But most people don't actually buy options with the intention of exercising them. And instead, they plan to sell that
option to someone else before it expires. And real quick, any options contracts above that gray line are going to be considered out of the money. And that means the share price would have to climb higher in order for these to be
contract, you're going to see a dollar value listed with a plus sign. And this is called the option premium. This is the price that you're going to pay to buy the option contract. And it will fluctuate based on the underlying share
price and how close the contract is to expiration. For example, let's say you bought a $190 call option on Nvidia and a week later the stock shot up to $200.
The ability to buy that stock at $190 would now become a lot more valuable and it would likely command a higher option premium. So, you could theoretically sell that option contract to somebody else and potentially make money from the
increase in the option premium. One final detail that you'll notice is the break even dollar amount and percentage to break even. This basically shows you what the price of Nvidia would need to reach in order for you to break even on
your investment. And it more or less just takes the strike price of the investment and adds the option premium to reach that figure. Now, before we take a look at some actual contracts, let's now switch gears and talk about
put options. So, we're going to switch this over here at the top. And buying put options means you are placing a bearish bet on the stock, which means you would potentially make money if the asset declined in value. More
specifically, put options give you the right, but not the obligation, to sell a stock at a fixed price before the expiration date. So, let's take a look at some of these Nvidia put options with the same March 20th expiration date. The
first thing that you're going to notice is that these contracts have dropped in value today across the board. And that's because the share price of Nvidia went screen here, we can see that same gray line representing the current share
price of Nvidia. But in this case, it's actually going to be the contracts above options can be a little bit more confusing, but think about it this way. Let's say you had a $200 put option. That means that you could sell Nvidia
stock for $200 any time between purchasing the contract and the expiration date. Nvidia stock is currently about $185, but if it dropped to $150, for example,
the ability to sell at $200 would become a lot more valuable, and that could result in a higher option premium. Circling back to the share price in the middle of the screen, contracts below that line are going to be out of the
money. Think about it this way. If you could sell Nvidia for about $185 today at the market price, why would you want to sell it at $180 175 and so forth? But
if Nvidia's share price dropped, that could allow those contracts to move into the money and they could potentially be exercised. And in terms of the break even price and percentage to break even on this screen, you're basically taking
the strike price and subtracting the option premium in this case. So, let's actually click into one of these options now and talk about some more details. We're going to choose the $200 put option here that is expiring on March
20th. The first thing you're going to notice is the bid in the ask price at the top, which is constantly changing. And just like with stocks, there are real buyers and sellers trading these that are ultimately determining the
option premium. But what a lot of people don't realize is that the option premium listed, which is between 2120 and 2130 at this very moment, is only the price for one share. Since each contract represents 100 shares, you actually have
to multiply this number by 100. So, if we go ahead and click here on the buy button, we can see that the cost for purchasing just one of these option purchasing just one of these option contracts is actually over $2,100.
than you would expect in order to actually trade these option contracts. Now below that on the screen here we can see the max profit listed the break even as well as the max loss. In this case the max loss is the entire amount that
you put in. And that's why a loss of 100% with options is very common. And as I'm sure you guessed, we're not actually going to buy this option contract. But those are the steps here that you would follow. Let's now jump back over to the
call option side of things and take a look at one of those contracts. Taking a look at the $200 strike price with the same expiration, but on the call option side, we can see that same bid and ask price here listed at the very top. And
then if we click on the buy button, we can see that the estimated cost here would be the option premium times 100 or a little bit under $700. We can also see the max profit listed, the break even price that Nvidia would have to reach
and the maximum loss potential. Now, the reason why the max profit in this case is unlimited is because a stock's price could theoretically go up infinitely. But on the other side of the spectrum with put options, a stock price can only
drop so far before it becomes worthless. So guys, don't get too excited here about that unlimited max profit. Just like before, it also shows you the break even price. So in this case, Nvidia stock would have to climb to 206.90
in order for you to break even on this contract. And the maximum loss here is going to be the option premium time 100 or $690. The last thing I want to mention here is if you look in the top right, you can
see that with options contracts, the order type is set to a limit order by default. In general, it's recommended to only use a limit order when placing trades with options contracts. And here's why. Options are less liquid
because less people trade them. And that means that options are priced less efficiently than stocks. With a limit order, you're specifying the exact price or better that you are looking to buy or sell for. It's not recommended to use a
market order with options contracts because there's normally a much bigger difference between the bid and the ask price. Market orders essentially mean fill the order at whatever price is available. And with how volatile the
prices of options can be in addition to that lower liquidity, this is just not a up for me, guys. Thank you so much for tuning in. If you made it to the end of the video, make sure you hit that subscribe button so you don't miss out
forget to grab your free Robin Hood stock linked down in the description below when you open a new account. I hope this gave you a better idea about options trading for beginners. And the number one thing that I would recommend
here is doing a lot of research before diving in. In addition, there's apps out there like Weeull that offer paper trading simulators where you can actually practice options trading without using real money. I think it's
waters here first. So, feel free to click below to watch my full Weeble tutorial and learn more about their trading simulator. I'll see you next trading simulator. I'll see you next time.