About the Options Strategy Builder

The Options Strategy Builder helps you learn about, customize, and build a wide range of basic and advanced options strategies. With the Builder, you can seamlessly choose a strategy, adjust the strike prices or expiration dates, and place your order.

To get to the Options Strategy Builder, choose a stock or ETF to buy or sell (trade), and then select Builder (top left), where you’ll see the following strategy options:

• Single-leg strategies: The fundamental options strategies. These involve buying or selling a call or a put.

• Vertical spreads: Simultaneously buy and sell similar options using different strike prices. Vertical spreads are designed to profit from gains or losses in the price of an underlying asset.

• Straddles and strangles: Two-legged strategies that are designed to profit from volatility.

• Calendar spreads: Simultaneously buy and sell similar options using different expiration dates. Calendar spreads are designed to profit from differences in implied volatility over time.

When you open the Options Strategy Builder, you’ll see a list of strategies with corresponding charts. Each chart helps explain how a strategy operates.

For example, the following chart shows a call debit spread strategy:

• Vertical y-axis shows the strategy’s profit or loss
• Horizontal x-axis shows the price of the underlying asset
• Dotted line represents the break-even point
• Green dot represents buying a call or put
• Red dot represents selling a call or put

Each strategy relates to an outlook, which is how you think the underlying asset will perform. Within the Builder, you can filter by outlook, such as: bullish (green), bearish (red), volatility (purple), and neutral (gray).

1. After you select a strategy, you’ll see the list of options contracts in order based on the strike price or prices.

   NOTE: Select the question mark to see more details about the chosen strategy.

2. Customize the strategy:

• For multi-leg strategies with a single expiration date (such as vertical spreads, strangles, straddles, and condors), you can browse the strike prices by selecting the strike price width or the strike price of the first leg. The width is the difference between the strike prices of the legs in your strategy. Alternatively, if you set the first leg strike price, you can then browse by the strike price of the second leg.
• For calendar spreads, you will first set the expiration date for the short-dated leg, and then the expiration date for the long-dated leg.

3. Depending on your strategy, you can view strategy-specific details on the chain, such as:

• Breakeven for single-leg strategies
• The bid and ask for multi-leg strategies
• After selecting a strategy, you’ll see more stats like max gain, max loss, and the Greeks

4. Select the strategy price to place the order for that strategy, and then select the quantity and limit price for the order.
5. Review and then submit your order.

Options trading entails significant risk and is not appropriate for all investors. Options transactions are often complex and may involve the potential of losing the entire investment in a relatively short period of time. Certain complex options strategies carry additional risk, including the potential for losses that may exceed the original investment amount.

Robinhood Financial does not guarantee favorable investment outcomes and there is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing. To learn more about the risks associated with options, read the Characteristics and Risks of Standardized Options before you begin trading options. The past performance of a security or financial product does not guarantee future results or returns. Because of the importance of tax considerations to all options transactions, the customer considering options should consult their tax advisor as to how taxes affect the outcome of each options strategy. Also be aware of the risks listed in the following documents: Day Trading Risk Disclosure Statement and FINRA Investor Information. Examples contained in this article are for illustrative purposes only. Supporting documentation for any claims, if applicable, will be furnished upon request.

"Chance of profit" is an estimate based on the model assumptions and does not guarantee future results. Numerous factors that are not reducible to a model determine the actual chance of profit for a particular option contract or strategy.