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  1. 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 ...

  2. Our Options Knowledge Center explains terminology, basic and advanced trading strategies, and how to place an options trade on Robinhood. Options versus stocks Options are a way to actively interact with stocks you’re interested in without actually trading the stocks themselves.

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  4. Apr 5, 2024 · In the money: options with strike prices that would give you the right to trade the stock at a better price than the current price of the stock. For calls, it’s the options with strike prices that are lower than the stock price. For puts, it’s options with strike prices that are higher than the stock price.

    • What's A Covered Call?
    • When to Use It
    • Building The Strategy
    • The Goal
    • Cost of The Trade
    • Factors to Consider
    • How Is A Covered Call Different from A Naked Call?

    A covered callis a bullish strategy that involves owning 100 shares of the underlying stock or ETF and simultaneously selling a call option (also known as a short call). At Robinhood, you must already own 100 shares of the underlying stock or ETF to sell a call. In options trading, shortdescribes selling to open, or writing an option. Selling a cal...

    A covered call is a bullishstrategy. You might consider one if you think the underlying stock price will moderately rise in the near future. Having said that, it can also be used if you think the stock will remain relatively stable, or even drop slightly. Covered calls can be used for a number of reasons, including: 1. To generate income. When you ...

    To create a covered call, you must first own 100 shares of the underlying stock or ETF for each call you plan to sell. Start by selecting an expiration date and then choose a strike price. Typically, a covered call is opened by selling an out-of-the-money call option. Next, select your order type, and specify your price. When selling a call, the cl...

    A covered call is commonly used to generate income. When selling a covered call, it’s important to view the strategy through the lens of your long stock position. Unlike other options-only strategies, a covered call is a combination of long shares and a short call option. As such, the price of the long stock ultimately determines whether the combin...

    To sell a call you must own 100 shares of the underlying which act as collateral. In exchange, you’ll collect the premium paid by the option’s buyer. Although you collect a credit to sell the call, your potential profit or loss isn't realized until you close the option, or it expires. Let’s say, you sell a call for $2. Since a standard option contr...

    Look for an underlying stock or ETFthat’s trending sideways, or one you think has the potential for limited movement in either direction. Consider one on the higher end of its implied volatilityran...
    Choose an expiration datethat optimizes your window for success. When selling covered calls, traders will most often look at options expiring in 30-45 days. This timeframe provides a good balance b...
    When selecting a strike price, the most common approach is to sell an out-of-the-moneyoption. Out-of-the-money calls are when the strike price is higher than the underlying stock price. The short c...
    When selling a covered call, a general rule used by traders is to try to collect a premiumthat’s about 2% of the underlying stock value. For example, if the underlying stock was trading for $100, y...

    Although a covered call and a naked call both involve selling a call option, these two strategies are very different: 1. A covered call involves owning 100 shares of the underlying stock and a naked call does not. 2. A covered call has defined risk, whereas a naked call has undefined risk. 3. With a covered call, if you’re assigned on your short ca...

  5. 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.

  6. Aug 9, 2023 · Step 5: Select options and complete orders. The design of the app’s trading screens is elegant and they are easy to read. The app may feature the simplest presentation of options quote data and ...

  7. Aug 26, 2020 · Sometimes, the option’s underlying stock can undergo a corporate action, such as a stock split, a reverse stock split, a merger, or an acquisition. Any corporate action will impact the option you hold, potentially resulting in changes to the option, such as its structure, price, and deliverable.

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