You can piece them together in different shapes and sizes to build something unique. They are generally risk-defined, and can be created and combined in various arrangements. What’s a spread?Ī spread is a combination of two or more different options that include both long and short positions, or “legs.” Spreads can be bought for a debit or sold for a credit. What if your charting skills have identified an area where the stock might move sideways and you’re looking to profit from a sideways market? Or perhaps you want to buy a call or put but you wish it wasn’t so expensive. Do you wish you could take a directional position without buying options premium, and thus put time decay in your favor? Maybe you think volatility is high relative to its historical average and you want to sell it. For many options traders, the journey ends there, and that’s ok.īut for others, there’s an entire world of possibilities to explore with options. Buying calls and puts are pure plays on the direction of the underlying stock. They’re more straightforward, relatively cheap, and usually the easiest strategy to understand. It makes sense that you started there since they’re the most commonly traded option strategies. ![]() If you’re reading this, you probably know a thing or two about single options strategies like buying calls and puts. All rights reserved.Multiple-option strategies: How to spread ![]() Robinhood, 85 Willow Road, Menlo Park, CA 94025. Please see Robinhood Financial’s Fee Schedule to learn more. Keep in mind, other fees such as trading (non-commission) fees, Gold subscription fees, wire transfer fees, and paper statement fees may apply to your brokerage account. listed securities and certain OTC securities electronically. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.Ĭommission-free trading of stocks, ETFs and options refers to $0 commissions for Robinhood Financial self-directed individual cash or margin brokerage accounts that trade U.S. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. Options trading entails significant risk and is not appropriate for all customers. RHY products are not subject to SIPC coverage but funds held in the Robinhood Money spending account and Robinhood Cash Card account may be eligible for FDIC pass-through insurance (see the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement). Cryptocurrencies held in RHC accounts are not covered by FDIC or SIPC protections and are not regulated by FINRA. Securities products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. ![]() RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. ![]() The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. The Robinhood Money spending account is offered through Robinhood Money, LLC (“RHY”) (NMLS ID: 1990968), a licensed money transmitter. Cryptocurrency services are offered through Robinhood Crypto, LLC (“RHC”) (NMLS ID: 1702840). Brokerage services are offered through Robinhood Financial LLC, (“RHF”) a registered broker dealer (member SIPC) and clearing services through Robinhood Securities, LLC, (“RHS”) a registered broker dealer (member SIPC).
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