How to Find Strike Price on Robinhood

Navigating the world of options trading can be daunting, especially if you’re just getting started. One crucial aspect of trading options is understanding the strike price, a pivotal component that determines whether your options trades will be profitable. If you’re using Robinhood for your trading, finding the strike price of an option is straightforward once you know where to look. In this guide, we'll walk you through the steps to find the strike price on Robinhood, breaking it down in a way that even beginners can easily grasp.

Strike Price Defined
Before diving into the steps, let's clarify what a strike price is. The strike price, also known as the exercise price, is the price at which the underlying asset can be bought or sold when an option is exercised. It’s one of the key components of an options contract, alongside the expiration date and the premium. In essence, the strike price is the price target for your trade.

Step-by-Step Guide to Finding the Strike Price on Robinhood

1. Open the Robinhood App
   Begin by launching the Robinhood app on your smartphone. If you haven’t already, log in with your credentials.

2. Navigate to the Stock or ETF
   Search for the stock or ETF you’re interested in trading options for. Use the search bar at the top of the screen to enter the ticker symbol or the name of the stock.

3. Select the Stock
   Tap on the stock or ETF from the search results to access its detailed page.

4. Go to the Options Tab
   Once you're on the stock's page, scroll down and tap on the “Trade” button. A menu will appear, and you should select “Trade Options.”

5. Choose Your Expiration Date
   You will be presented with a list of expiration dates for the options available. Select the expiration date that suits your trading strategy.

6. View Available Strike Prices
   After choosing an expiration date, you will see a list of available strike prices. These are the prices at which you can buy or sell the underlying asset. The list typically shows various strike prices above and below the current market price of the stock.

7. Select a Strike Price
   To view more details about a specific strike price, tap on it. This will bring up information such as the premium, the type of option (call or put), and other relevant details.

Understanding the Strike Price in Context

To make informed decisions, it's essential to understand how the strike price fits into the broader context of your trading strategy. Here’s a simplified breakdown:

• In-the-Money (ITM): An option is in-the-money if the strike price is favorable compared to the current market price. For a call option, this means the strike price is lower than the market price; for a put option, it’s higher.

• Out-of-the-Money (OTM): An option is out-of-the-money if the strike price is not favorable compared to the current market price. For a call option, this means the strike price is higher; for a put option, it’s lower.

• At-the-Money (ATM): An option is at-the-money if the strike price is approximately equal to the current market price.

Example

Suppose you're interested in a tech stock currently trading at $150. You’re looking at options with the following strike prices: $145, $150, and $155. If you believe the stock will rise above $155 by the expiration date, you might choose the $155 strike price for a call option. Conversely, if you think the stock will drop below $145, you might select the $145 strike price for a put option.

Key Takeaways

• Strike Price Selection: Your choice of strike price should align with your market outlook and trading strategy.
• Risk Management: Remember, the further out-of-the-money you go, the cheaper the premium, but the higher the risk of the option expiring worthless.
• Tool Familiarity: Familiarize yourself with the Robinhood app’s interface to make the process quicker and more intuitive.

Conclusion

Finding the strike price on Robinhood is a fundamental skill for options traders, and with this guide, you should now feel confident navigating the app to locate this critical piece of information. Whether you're an aspiring trader or a seasoned pro, understanding how to find and select the right strike price can significantly impact your trading success. Dive into the options market with these insights, and you’ll be better prepared to make strategic decisions.