How to Buy Put Options on Robinhood
The basic steps to buy a put on Robinhood
To buy a put option on Robinhood, open the app, search for the stock you want, tap the option chain icon, select your expiration date and strike price, choose "Put", enter the number of contracts, and review the cost before you confirm the order. A put gives you the right to sell 100 shares of that stock at a fixed price by a certain date — you pay a premium upfront for that right, and you keep that premium if you never use it.
The entire process takes about two minutes once you know which put you want to buy. Robinhood shows you the bid price (what buyers will pay you if you sell the contract back) and the ask price (what you will pay to buy it). You will almost always pay the ask price when you buy.
Your account must have enough cash or buying power to cover the premium. If a put costs $2.50 per share, one contract (100 shares) costs $250 before any fees. Robinhood does not charge commission on options trades, but your broker may charge regulatory fees of a few cents per contract.
Key Takeaways
- A put option costs money upfront (the premium) and gives you the right to sell 100 shares at a fixed strike price before the expiration date.
- You buy puts through the Robinhood app by finding the stock, opening the option chain, selecting your expiration date and strike price, and confirming the order.
- The maximum you can lose on a put is the premium you paid, but the stock price can fall to zero, so your profit is theoretically unlimited.
- Robinhood charges no commission on options trades, but you pay the ask price (the higher of the two prices shown) when you buy.
- You can close a put before expiration by selling it back, or hold it until expiration and let it expire worthless or exercise it to sell shares.
Understanding put option pricing and the bid-ask spread
When you look at a put in Robinhood, you see two prices: the bid and the ask. The bid is what someone will pay you right now if you sell that put back to them. The ask is what you will pay right now if you buy it. The difference between them is the bid-ask spread, and it is the cost of getting in and out quickly.
A put that is deep in the money (strike price well above the current stock price) has a tight spread and moves almost dollar-for-dollar with the stock. A put that is far out of the money (strike price well below the current stock price) has a wider spread and moves slowly. Puts that expire soon are cheaper than puts that expire months away, because there is less time for the stock to move.
Robinhood shows you the Greeks — delta, gamma, theta, and vega — which measure how the put price changes when the stock moves, when time passes, or when volatility changes. Delta tells you roughly how much the put price will move if the stock moves $1. Theta tells you how much the put loses value each day just from time passing. Most new traders ignore the Greeks at first, but they matter more as you hold longer or buy puts further out of the money.
Choosing an expiration date and strike price
Robinhood shows you expiration dates ranging from a few days away to years in the future. Shorter expirations are cheaper but decay faster — a put that expires in one week loses value every single day, even if the stock does not move. Longer expirations cost more but give you more time for the stock to fall and more room to be wrong about timing.
The strike price is the price at which you have the right to sell. If you buy a $50 put on a stock trading at $55, you are betting the stock will fall below $50 before expiration. If it does, the put gains value. If it stays above $50, the put expires worthless and you lose the premium you paid.
Most traders new to puts buy puts that are slightly out of the money (strike price below the current stock price) because they are cheaper and still profit if the stock falls. Buying puts that are deep in the money is more expensive but more likely to profit — you are paying for a higher probability of being right.
What happens when your put expires or you close it early
You have three choices when a put approaches expiration. First, you can sell it back to close the position — Robinhood will show you the current bid price, which is usually lower than what you paid if the stock has risen. Second, you can hold it until expiration and let it expire worthless if the stock stays above your strike price — you lose the premium. Third, you can exercise it, which means you sell 100 shares at the strike price, but this only makes sense if you own the shares or want to buy them at that price.
Most traders close puts early rather than hold to expiration. If you bought a put for $2.50 and the stock fell, the put might be worth $4.00 — you can sell it back and pocket the $1.50 gain without waiting for expiration. Closing early also lets you move on to the next trade instead of watching the last few days of decay.
If you do hold to expiration and the put is in the money (stock price below strike price), Robinhood will automatically exercise it on your behalf, which means you will sell 100 shares at the strike price. If you do not own those shares, Robinhood will short them for you — you will owe them back later. This can be risky if you are not prepared for it, so close puts before expiration if you do not want to own or short the stock.
Margin requirements and account restrictions
Buying puts requires only the cash to pay the premium, so you do not need margin. However, if you want to sell puts (a different strategy), Robinhood requires margin and ties up buying power equal to the maximum loss — usually the strike price times 100. Buying puts does not tie up that much buying power.
Robinhood restricts options trading based on your account level. Level 1 allows covered calls and protective puts only. Level 2 allows buying calls and puts. Level 3 allows spreads and other multi-leg strategies. You can request a higher level in the app, and Robinhood usually approves within minutes if your account meets the requirements — usually $2,000 in account value and some trading experience.
If your account falls below $25,000, you are flagged as a pattern day trader if you make more than three day trades in five business days. Options trades count as day trades. Robinhood will restrict your account for 90 days if you breach this rule, so be aware of how many trades you make in a short window.
Common mistakes when buying puts on Robinhood
The most common mistake is buying puts too far out of the money and watching them expire worthless. A put that costs $0.50 feels cheap, but if the stock does not fall far enough, you lose the entire $50 per contract. Buying puts closer to the money costs more but has a higher chance of profit.
The second mistake is holding puts too long. Time decay accelerates in the final week before expiration — a put that lost $0.10 per day for three weeks can lose $0.30 per day in the last week. If you are right about the direction but wrong about timing, you can still lose money. Close puts early if they have made a profit, rather than waiting for expiration.
The third mistake is not checking the bid-ask spread before you buy. A put with a $1.00 spread means you start $1.00 in the hole just from buying and selling. Puts on large, liquid stocks like Apple or Tesla have tight spreads. Puts on small or illiquid stocks can have spreads so wide that you need a huge move just to break even.
How to monitor and close your put positions
Once you buy a put, Robinhood shows it in your "Open Orders" or "Positions" tab. You can see the current bid and ask prices, the Greeks, and your unrealized gain or loss. The unrealized loss is what you would lose if you closed the position right now at the bid price.
To close a put before expiration, tap the position, tap "Sell", and confirm the order at the bid price. Robinhood will execute the sale immediately and credit your account with the proceeds. This removes the position from your account and locks in your gain or loss.
Set a price target or a time target before you buy. For example, "I will sell this put if it doubles in value" or "I will close this put one week before expiration." This keeps you from holding too long and watching profits evaporate. Robinhood does not offer automatic stop-loss orders for options, so you have to monitor your positions manually or set phone reminders.
Frequently Asked Questions
What is the most I can lose if I buy a put?
The most you can lose is the premium you paid upfront. If you buy a put for $2.50 per share ($250 per contract), that is the maximum loss — the stock can fall to zero and the put will not be worth more than the strike price minus zero. This is why buying puts is considered less risky than buying calls, where losses can theoretically be unlimited.
Can I buy a put on a stock I do not own?
Yes. Buying a put does not require you to own the stock. You are simply buying the right to sell at a fixed price. If you exercise the put at expiration, Robinhood will short the stock for you if you do not own it, but most traders close puts before expiration instead.
How much money do I need to start buying puts on Robinhood?
You need enough cash to pay the premium for one contract. Premiums vary widely — a put might cost $50 or $500 depending on the stock and expiration date. Robinhood requires $2,000 in account value to request Level 2 options trading, which allows buying puts, but you can start with less if you already have the level.
What is the difference between buying a put and shorting a stock?
Shorting a stock means borrowing shares and selling them, hoping to buy them back cheaper. Your loss is unlimited if the stock rises. Buying a put limits your loss to the premium paid but costs money upfront. Puts also expire, while short positions can stay open indefinitely.
Can I sell a put I bought before expiration?
Yes. You can sell any put you own back to the market at any time before expiration. Robinhood shows you the current bid price. If the put has gained value, you can close it for a profit. If it has lost value, you can close it to cut your loss rather than hold to expiration.