About the Options Strategy Builder | Robinhood

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.

Options Strategy Builder image

Note

A multi-leg strategy places an order for more than one option at the same time. Each leg is a single option contract.

Options strategies

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.

Strategy charts

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

Strategy Builder chart example

Outlook filter

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).

Note

The outlook of some strategies (like calendar spreads) might vary depending on which strike prices you choose.

Place an order with the Builder

  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.
  1. 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
  1. Select the strategy price to place the order for that strategy, and then select the quantity and limit price for the order.
  2. Review and then submit your order.
Note

See Things to consider when choosing an option to get more details about the expiration date, strike price, premium, break-even point and percentage, and chance of profit percentage.

Disclosures

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.

Was this article helpful?
Reference No. 3028630
Still have questions? Contact Robinhood Support
PARTICIPATION IS POWER™

All investing involves risk.

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). Cryptocurrency services are offered through Robinhood Crypto, LLC (“RHC”) (NMLS ID: 1702840). The Robinhood Money spending account is offered through Robinhood Money, LLC (“RHY”) (NMLS ID: 1990968), a licensed money transmitter. Credit card products are offered by Robinhood Credit, Inc. (“RCT“) (NMLS ID: 1781911 and issued by Coastal Community Bank, pursuant to a license from Visa U.S.A. Inc.

The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Securities products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. Cryptocurrencies held in RHC accounts are not covered by FDIC or SIPC protections and are not regulated by FINRA. 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 (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. 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.

Commission-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. listed securities and certain OTC securities electronically. 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. Please see Robinhood Financial's Fee Schedule to learn more.

Robinhood, 85 Willow Road, Menlo Park, CA 94025.© 2024 Robinhood. All rights reserved.
Follow us on

All investing involves risk.

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). Cryptocurrency services are offered through Robinhood Crypto, LLC (“RHC”) (NMLS ID: 1702840). The Robinhood Money spending account is offered through Robinhood Money, LLC (“RHY”) (NMLS ID: 1990968), a licensed money transmitter. Credit card products are offered by Robinhood Credit, Inc. (“RCT“) (NMLS ID: 1781911 and issued by Coastal Community Bank, pursuant to a license from Visa U.S.A. Inc.

The Robinhood Cash Card is a prepaid card issued by Sutton Bank, Member FDIC, pursuant to a license from Mastercard® International Incorporated. RHF, RHY, RHC and RHS are affiliated entities and wholly owned subsidiaries of Robinhood Markets, Inc. RHF, RHY, RHC and RHS are not banks. Securities products offered by RHF are not FDIC insured and involve risk, including possible loss of principal. Cryptocurrencies held in RHC accounts are not covered by FDIC or SIPC protections and are not regulated by FINRA. 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 (review the Robinhood Cash Card Agreement and the Robinhood Spending Account Agreement).

Options trading entails significant risk and is not appropriate for all customers. Customers must read and understand the Characteristics and Risks of Standardized Options before engaging in any options trading strategies. 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.

Commission-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. listed securities and certain OTC securities electronically. 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. Please see Robinhood Financial's Fee Schedule to learn more.

Robinhood, 85 Willow Road, Menlo Park, CA 94025.© 2024 Robinhood. All rights reserved.