Depending on the options strategy you use, we may hold stocks or cash as collateral to make sure you can cover the position in case of assignment.

Collateral held in stock

• Selling to open a covered call: You’ll need 100 shares per contract of the underlying stock in your portfolio to cover the position. As long as the position is open, you won’t be able to sell 100 shares of the underlying stock.

Collateral held in cash

• Selling to open a cash-covered put: We’ll set aside enough money from your portfolio to buy the underlying stock at the contract’s strike price.
• Opening a credit spread: We’ll set aside enough cash from your brokerage account to cover your theoretical maximum loss.

You can check exactly what collateral is held on the Detail page of the underlying stock.

When you place an options order, we’ll hold the appropriate collateral (cash or stock) beginning at the pending state. The same way we hold enough cash to fill your pending order when you open an equity position, we’ll hold enough cash or stocks to cover your option position until the order is canceled.

Eligible cash held as options collateral earns a 3.35% annual percentage yield (APY) as part of the High-Yield Cash Program, which is available to Robinhood Gold subscribers ($5 monthly subscription).

Each day, you earn interest based on the settled balance of options cash collateral for open positions at the end of the previous trading day. For example, if you open and close an options position on the same day, you won’t have a settled balance of options cash collateral to earn interest. You can find the cash collateral amount that is earning interest in Investing → Cash → Cash earning interest, which can differ from your current options collateral requirement because it is based on the previous trading day.

You’ll get paid earned interest monthly on the last business day of each month. Note that the interest accrues and compounds daily.

For more details, review High-Yield Cash Program.