#442 - Can You Trade Options On Robinhood?

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Dec 8, 20183m
#442 - Can You Trade Options On Robinhood?
Dec 8 '183m
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Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to answer the question, “Can you trade options on Robinhood?” If you’re not familiar, Robinhood is a fairly new brokerage that came out that has zero commission fees and they recently launched and one of their public announcements was actually on one of our podcast as I interviewed one of the cofounders, Baiju on the podcast just a couple of months ago, that they allow people now to trade options commission-free on their platform. So, to answer the question broadly, “Can you trade options on Robinhood?” Yes. Is it easy to trade options on Robinhood? Yes, it is easy to get into single contracts, but it's probably not so easy to create very high probability spreads and high probability rolling situations. I find that the complex type orders on Robinhood to be much more confusing, very less intuitive at least right now at the time that we’re doing this podcast.

Although you get a platform for free and commission-free, I feel that in many respects, you could be losing out sometimes on the lack of technology and the lack of insight and analytics for the particular option contracts that you’re trading. What you might feel like you're saving in commissions, you might lose in slippage or lost opportunity by using the wrong option strategy at the wrong time or not having the ability to quickly hedge and roll positions inside of the app or platform. I think it's a work in progress. I think it’s something that is very interesting. As I’ve said before, I think all brokers eventually will be zero commissions, so I think it’ll ultimately come down to who has the best technology stack, who offers the best tools for zero commission as this race to the bottom continues in the industry. But right now, you can trade options on Robinhood. I don't think the best platform for complex trading and for high probability trading, but it at least gets the job done. Hopefully this helps out. As always, if you have any questions, let me know and until next time, happy trading.

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