Robinhood Multi Leg Options Overview
If you trade stocks or options at Robinhood, you probably know that the broker does not charge commissions for any trades. It’s rare to find no-fee options trading in the industry, and this is a big advantage for using multi-leg options strategies.
Building multi-leg options positions at Robinhood lets you have more control over your trading plan. You can reduce your overall costs on pricey options, try to profit from market direction, or use time in your favor.
Whether you use credit spreads, debit spreads, butterflies, condors, or calendars, you can employ spreads to refine your trading approach.
Fees and Commissions
Before looking at the types of options strategies you can use at Robinhood, note that Robinhood is one of the few brokers to provide commission-free spread trading. This pricing approach is especially helpful for investors who create multi-leg options trades.
Types of Multi Leg Options at Robinhood
Robinhood lets you create many multi-leg options strategies. Which ones you can use depends on your trading permission level.
Multi-leg options trading is available at Level 3.
These are the multi-leg strategies you can trade at Robinhood:
- Credit Spreads
- Debit Spreads
- Calendar Spreads
- Diagonals
- Iron Condors
- Iron Butterflies
- Butterflies
- Unbalanced Butterflies
- Broken Wing Butterflies
Keep in mind that you must build these multi-leg positions yourself.
Let’s see how to open and manage multi-leg option positions.
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Placing a Multi Leg Options Trade
Depending on the multi-leg options strategy you want, you’ll choose two to four legs. These can be any mix of buys, sells, calls, and puts. You can also select different expiration dates for each leg.
The colors you see (red and green) change depending on whether calls or puts are gaining or losing value.
By using buys, sells, calls, and puts, you can build your desired multi-leg strategy.
Here’s an example of how to create a Put Butterfly on a popular tech stock.
First, pick the contracts and their expiration dates. Switch between buy and sell to form the short and long parts of your position.
You’ll see that you can’t set the number of contracts for each leg yet. That comes next.
Once you’ve chosen your contracts, you can change the contract quantity per leg by selecting ‘Custom.’ This lets you set a unique ratio for any leg of your trade.
In our example, we add one short put to form a butterfly. The profit/loss calculator updates to show the potential risk and reward.
When you’re happy with your multi-leg setup, click ‘Continue’ (green button) to go to the order confirmation screen.
Free Robinhood Account
1% IRA match and up to $200 FREE stock at Robinhood.
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Managing Multi Leg Positions
Managing multi-leg options positions is fairly simple, but there are things to know.
Managing could mean adding to or closing a position, or adjusting your strategy in another way.
The main point is how changes affect the margin needed for the position. Adding or removing legs can change the margin requirements.
Remember, Robinhood doesn’t allow naked options at any level. If you remove a leg, the remaining ones must still be covered.
Legging In and Out
Some traders ‘leg in and out’ to secure profits or form new spreads without closing the initial position.
For example, if you bought a call and it’s profitable, you could sell another call against it to create a debit spread instead of just closing your original call.
If the price drops, the debit spread loses value more slowly than a single call would.
The debit spread still has room to grow if the price moves in your favor.
Closing the Position
Closing parts of a multi-leg options strategy can be limited. It’s easiest to close the entire position. You can also close any short legs without adding margin risk.
Robinhood Multi Leg Options Pros and Cons
Robinhood has improved a lot in options trading and now offers many advanced multi-leg strategies. This gives traders more control and the chance for profits in different market situations.
Still, improvements can be made. Here are some pros and cons.
Pros
- Clear and simple option chains
- Easy contract selection
- Useful profit/loss charts
- Wide range of multi-leg strategies
Cons
- Complex orders may fill slowly
- No naked options allowed
- Building each leg manually takes time
- Adjusting contract quantity requires extra steps
Robinhood Alternative
If you want another broker for options, check out Webull multi leg options.
Robinhood Multi Leg Options Summary
Overall, Robinhood is a good place for multi-leg options. Its spreads let you trade expensive stocks, manage risk, and use different market conditions to your advantage. While there’s room to grow, most traders will find what they need for their strategies and goals.
Visit Robinhood Website
1% IRA match and up to $200 FREE stock at Robinhood.
Visit Robinhood Website
Updated on 2/24/2025.
I work in investment analytics and have been investing in the market since I was in high school. I enjoy anything that involves lots of strategy (i.e. a good game of chess), which is why I was naturally drawn to investing and researching companies. Outside of investing, I’m a big fan of the outdoors. In summer, you’re most likely to find me kayaking, camping, and hiking in the mountains.
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