Robinhood Options Spreads
Robinhood is widely recognized for its low-cost approach to investing. The firm helped popularize
commission-free trading and continues to focus on value-oriented pricing. One notable feature is its
low-cost options spread trading.
No matter which securities you trade at Robinhood, whether they are stocks, ETFs, or a mix of both, options spreads can give you additional ways to manage your portfolio.
Robinhood gives traders access to many advanced options spread strategies. You can build spreads that are designed for different market outlooks. Depending on the strategy, spreads can be used when prices move higher, lower, or even stay within a range.
Keep reading to learn more about options spread trading at Robinhood.
Options Trading Permissions at Robinhood
To trade options spreads at Robinhood, you must be approved for Level 3 options trading. As Robinhood’s advanced options approval level, Level 3 allows eligible traders to use more complex multi-leg strategies.
Types of Options Spreads Available at Robinhood
Robinhood offers a range of options spreads for different strategies. You can use debit spreads to define risk, credit spreads to collect premium, volatility strategies to seek gains from larger price moves, or neutral strategies to target a specific trading range.
Here are the spreads and multi-leg strategies you can trade with Robinhood:
- Debit Spreads
- Credit Spreads
- Iron Condors
- Iron Butterflies
- Straddles
- Strangles
- Calendar Spreads
- Diagonals
- Butterflies
Robinhood Promotion
How to Place Options Spread Orders on Robinhood
Placing an options spread trade at Robinhood is fairly simple, although there are a few important details that traders should understand.
The main thing to remember is that you should understand how your desired spread is constructed. Robinhood offers an Options Strategy Builder that can help you choose and customize certain strategies, and you can also work with individual legs when building multi-leg trades.
Here’s how the process works.
Option Spreads Building Blocks
Before building spreads, it helps to understand the mechanics of Robinhood’s options chains, strategy tools, and order format.
As with many Robinhood tools, the options layout is designed to be straightforward. You can choose between buying and selling, calls and puts, and expiration dates for the legs in your spread.
With Robinhood’s spread “building blocks,” and with the Strategy Builder when available, you can create many common options spread strategies.
Setting Up an Option Spread
To set up an option spread at Robinhood, you can use the available options tools in several ways. You can combine long and short calls and puts to create spreads with different levels of complexity.
To begin, go to the options chain of the stock, ETF, or eligible index you want to trade.
You’ll start the contract-selection process from the options chain. For our example, we will build a debit spread with a same-week expiration. We want to profit if the stock price moves lower.
The current price of our example stock is $280, and we think the price will fall to $250 by the end of the week. For this outlook, we are using a put debit spread. We will buy the spread for a debit and seek a profit if the price moves in our favor.
Start by selecting a long put. Your long put can be in the money, at the money, or out of the money. The risk and reward profile will change depending on which contract you choose. We are choosing an out-of-the-money long put to lower the cost and reduce the amount at risk.
Notice the PnL calculator for the single option and the price.
Next, select a short put that is farther out of the money. The distance between the two strike prices will define the spread’s maximum potential profit before subtracting the debit paid. We are selecting an option that is $10 below the long put, which creates a $1,000-wide spread before the debit paid is deducted.
Again, review the expected PnL graphic and the updated price.
Once you have created the spread you want, you can choose the number of contracts, your preferred price, and the Time in Force.
Options Trading Margin Requirements
To trade options spreads at Robinhood, you don’t necessarily need a very large account balance. However, you do need to qualify for Level 3 options trading, and Level 3 is available in margin accounts, not in cash accounts or Robinhood Retirement accounts.
It is also good to know that Level 3 options trading may be available in Robinhood margin-enabled accounts, including eligible Instant accounts and Robinhood Gold accounts.
Fees and Commissions
Robinhood is known for low-cost options trading. The broker charges no base commission, no exercise or assignment fee, and no per-contract fee on stock and ETF options. Index options are different because Robinhood says they have a low contract fee, and standard regulatory or exchange-related fees may also apply.
Robinhood Options Spread Trading Pros and Cons
Options spread trading at Robinhood has both advantages and disadvantages.
Pros
- Creating spreads is easy to do at Robinhood
- There are no account minimums to meet to get started
- Robinhood’s theoretical PnL graph makes it easy to ‘see’ how a position may perform
- Good selection of spreads to choose from
Cons
- Robinhood does not show the expected Market Maker Move (MMM) for options
- Fills for ‘custom’ spreads can be a bit slow to fill
- You must understand how your preferred spreads are built, even when using Robinhood’s strategy tools
Written by Alex Bost
Updated on 5/11/2026.
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