If you’re like most people, you’ve probably heard of Robinhood—the app that lets you trade stocks without paying any fees.
But did you know that you can’t trade options on Robinhood?
Here’s a look at why that is and what your alternatives are.
Reasons Why You Can Not Trade Options On Robinhood
There are various reasons why one may experience problems when trading Options on Robinhood:
1) The main reason is that the platform does not allow you to trade options with a margin account, which means that if your account balance drops below $5k, Robinhood will close your account and ask for more money from issue is that there are no free trades available, so you have to pay for each option trade (which can be as much as $2 per contract).
2) Furthermore, it seems like they don’t offer any kind of leverage, meaning that you cannot use your own funds to open positions in the market.
This makes sense because otherwise people would just buy stocks or ETFs without opening an account at all.
3) Moreover, one may also experience problems when trading Options on Robinhood due to their fees.
The minimum fee for options trading is 0.25% per transaction, but this doesn’t include other fees such as taxes, etc.
So if you want to do Option trading on Robinhood, make sure to check out our Fees page first!
4) Furthermore, one may also experience problems when trading Options on Robinhood because of the fact that they only support US-based customers.
If you live outside of the United States, then you won’t be able to access the platform.
5) Another thing that might cause problems is that they don’t accept cryptocurrencies yet, so if you want to trade Bitcoin, Ethereum or Litecoin, then you won‘t be able to do so on Robinhood.
6) Finally, another problem that many users report is that the platform isn’t very user friendly.
For example, some people say that it takes them several hours before they get used to the platform, while others claim that they were unable to find how to place orders.
Also Read: Robinhood Hidden Fees
Can Everyone Trade Options On Robinhood?
For one to be approved to trade options on Robinhood, it is required that they be at least 18 years old.
Moreover, only US citizens are allowed to access Robinhood.
Who Can Trade Options On Robinhood?
One of the biggest advantages of using Robinhood is that anyone can sign up for an account.
You don’t need to have any previous experience in order to start trading Options on Robinhood.
In addition, Robinhood offers a great mobile app that allows you to easily manage your portfolio and place orders from anywhere.
Furthermore, the app has been optimized for both iOS and Android devices, so you can trade wherever you go.
Who Can Not Trade On Robinhood?
If you are under 18 years old, then you aren’t allowed to open an account on Robinhood.
In addition, minors are not allowed to trade Options on Robinhood either.
Furthermore, if you are a non-US resident, then you will not be able to access Robinhood.
However, if you are willing to relocate to the United States, then Robinhood will gladly welcome you.
Unfortunately, Robinhood doesn’t also allow its users to trade options with a debit card.
In addition, they don’t allow their clients to trade options with a credit card either.
This means that if you want to trade options on Robinhood, then you should always keep enough cash on hand in order to avoid getting stuck in a situation where you run out of money and can’t continue trading.
Also Read: Does Robinhood Affect Credit Score?
The Bottom Line
Robinhood is a great platform for beginners who want to learn about options trading.
However, it doesn’t provide advanced features like limit orders and stop-loss orders, so it’s best suited for those who already have a good understanding of options trading.