Robinhood Iron Condor or Butterfly Spreads in 2026
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Robinhood Options Spreads
Robinhood is well-known for its no-commission approach to investing. The firm was the first to
offer free trading and still follows this low-cost approach. One stand-out feature is the
commission-free options spread trading.
No matter which securities you trade at Robinhood, whether stocks, ETFs, or both, option spreads give you more ways to manage your portfolio.
Robinhood gives traders access to many advanced options spread strategies. You can easily create spreads that can benefit from different market conditions. Spreads make it possible to profit when prices go up, down, or move sideways.
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 Permission. As Robinhood’s highest options trading level, Level 3 allows traders to use the broker’s most advanced options spreads.
Types of Options Spreads Available at Robinhood
You can find an option spread at Robinhood to match almost any strategy you have in mind. Selling spreads for a credit, limiting risk with debit spreads, earning from time decay, or aiming for a larger payoff with a specific price target are all possible.
Here are the spreads you can trade with Robinhood:
- Debit Spreads
- Credit Spreads
- Iron Condors
- Iron Butterflies
- Broken Wing Butterflies
- Unbalanced Butterflies
- Calendar Spreads
- Diagonals
- Butterflies
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How to Place Options Spread Orders on Robinhood
Placing an option spread trade at Robinhood is simple, but there are some steps that investors should understand.
The main thing to remember is that you need to know how your chosen spread is built. Robinhood does not offer a spread selection menu like many other brokers. Instead, advanced options positions are created by choosing each leg one at a time.
Here’s how to do it.
Option Spreads Building Blocks
To start building spreads, it helps to understand how Robinhood’s options chains and order screens work.
As with most things at Robinhood, simplicity is the focus of the options trading layout. You can choose between buying and selling, as well as calls and puts. You can also choose the expiration date for each leg of your spread.
With Robinhood’s spread ‘building blocks (our term),’ you can create almost any options spread you want.
Setting Up an Option Spread
To set up an option spread at Robinhood, you can use the ‘building blocks’ in many ways. You can mix long and short calls and puts to create spreads of different complexity.
To get started, go to the options chain of your chosen stock or ETF.
You will start the contract selection process from the options chain. For this example, we will build a debit spread with the same-week expiration. We want to profit if the stock price moves down.
The current price of our example stock is $280, and we think the price will drop to $250 by the end of the week. For this idea, we are using a put debit spread. We will buy the spread for a debit and profit if the price moves in our favor.
Start by choosing a long put. Your long put can be in, at, or out of the money. The risk and reward will change based on your choice. We are choosing an out-of-the-money long put to lower the cost and risk.
Notice the PnL calculator for the single option and the price.
Next, choose a short put that is further out of the money. The distance you choose will set the maximum profit for your spread. We are selecting an option that is $10 lower ($1000 minus the debit paid for the spread if the full profit is reached).
Again, look at the expected PnL chart and the updated price.
Once you have built your spread, you can choose how many contracts to trade, your limit price, and the Time in Force.
Options Trading Margin Requirements
To trade options spreads at Robinhood, you do not need to keep a large balance in your account. As long as you have Level 3 options trading permission, you can trade spreads as much as you like.
It is also helpful to know that you can enable Level 3 options trading in both the Instant Account (basic margin account) and Robinhood Gold.
Fees and Commissions
It is important to remember that Robinhood has zero commissions on options trades. This means placing complex spreads does not add extra cost. Robinhood is one of the few brokers that offers this kind of pricing, which is a big benefit for active options traders.
Robinhood Options Spread Trading Pros and Cons
Options spread trading at Robinhood has both advantages and drawbacks.
Pros
- Creating spreads is easy at Robinhood
- There are no account minimums to get started
- Robinhood’s PnL chart makes it easy to see how a trade may perform
- Good selection of spreads to choose from
Cons
- Robinhood does not show expected Market Maker Move (MMM) for options
- Fills for custom spreads can sometimes be slow
- You must know how your spreads are built because Robinhood does not automate the process
Updated on 1/11/2026.
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