Options Education
Learn to Trade Options on Robinhood
A complete guide to understanding, reading, and executing 0DTE option contracts — from the basics to placing your first trade.
Section 1
Understanding Option Contracts
Before you place a trade, you need to understand what you are actually buying.
What is an Option Contract?
An option contract gives you the right — but not the obligation — to buy or sell 100 shares of a stock at a specific price, before a set expiration date. You pay a premium upfront for that right. On Robinhood, one contract always controls exactly 100 shares.
You believe the stock will go UP. A call gives you the right to buy 100 shares at the strike price. Profit when the stock rises above your strike.
You believe the stock will go DOWN. A put gives you the right to sell 100 shares at the strike price. Profit when the stock falls below your strike.
Key Terms You Must Know
The agreed price at which you can buy (call) or sell (put) the stock. Hood Options always targets the ATM (At-The-Money) strike — the strike closest to the current stock price.
Example: SPY is at $737. The ATM strike is $737.
0DTE means the contract expires TODAY — the same trading day you buy it. These are the highest-risk, highest-reward contracts available. If the stock doesn't move your way before market close (4:00 PM ET), the contract expires worthless.
Example: 0DTE expires at 4:00 PM ET the same day.
The price you pay for the contract. Hood Options shows this as "Premium per Share." Because one contract = 100 shares, multiply by 100 to get your total cost. This is your maximum possible loss.
Example: Premium $2.10/share × 100 = $210 contract cost.
In-The-Money (ITM) = favorable strike. At-The-Money (ATM) = strike equals current price. Out-of-The-Money (OTM) = unfavorable strike. Hood Options targets ATM for the best balance of cost and probability.
Example: SPY at $737 → $737 strike = ATM.
⚠️ 0DTE Risk Warning
0DTE contracts are the most speculative options available. They move extremely fast — a small stock movement can double or zero out your contract within minutes. Only risk money you can afford to lose entirely. Most traders limit each 0DTE trade to 1–5% of their total portfolio.
Section 2
Reading the Hood Options Dashboard
Every signal card on the Market Tracker tells a complete story. Here's how to read it.
Example Signal Card — SPY
S&P 500 ETF · Major ETF
75%
Confidence
The overall bias — CALL (bullish), PUT (bearish), or NEUTRAL. Only trade in the signal direction.
Percentage of technical conditions met. 75%+ = worth considering. Below 60% = skip the trade.
Volume-Weighted Average Price — the most important intraday benchmark. Price above VWAP = bullish bias. Price below = bearish.
Where the price sits in today's high/low range. Below 30% = potential bounce (CALL). Above 70% = potential reversal (PUT).
Reading a Trade Suggestion
Entry Price
$737.62
Current stock price when signal fired. Buy your option near this price.
Stock Target
$740.57
The stock price you need to reach for the option to gain ~20% in value.
Strike
~$738 ATM
The option strike to select in Robinhood — always the closest ATM strike.
Prem / Share
$2.21
Estimated premium per share. This is what the option costs before ×100.
Contract Cost
$221.00
Your total cost for 1 contract (premium × 100). This is your max loss.
+20% Target
$265.20
Sell your contract when it reaches this value — your profit target.
Section 3
How to Buy & Sell a Contract on Robinhood
Follow these exact steps every time you place a 0DTE options trade.
Find the stock
Search for the ticker from your signal card
SPY
SPDR S&P 500 ETF Trust
$737.62
+$6.04 (0.83%)
Open the options chain
Tap Trade → Trade Options on the stock page
SPDR S&P 500 ETF
$737.62
Buy
Sell
Trade Options →
Select today's expiration
Always choose the current date for 0DTE trades
Select Expiration
May 10 (Today)
✓ 0DTEMay 17
May 24
Jun 20
Choose Call or Put
Match the contract type to your Hood Options signal direction
Select Type
Call ✓
Put
Signal says CALL → select Call
Select the ATM strike
Pick the strike price closest to the current stock price
Strike Price (Calls)
$735
ITM
$3.80
$737
ATM ✓
$2.21
$740
OTM
$0.95
Set quantity to 1 contract and review
Start with 1 contract until you are comfortable with how options move
Order Review
Swipe to Submit
Sell to close — don't wait for expiry
Sell your contract when it hits the +20% target or if the trade goes against you
My Positions
SPY $737 Call
Exp: Today · 1 contract
+$44.20
+20.0%
Sell to Close →
⚡ Pro Tips for 0DTE Trades
Only trade between 9:45–11:30 AM and 2:00–3:30 PM ET
These windows have the best price action. Avoid the first 15 minutes and the last 30 minutes.
Use limit orders, not market orders
Options spreads can be wide. Set a limit price between the bid and ask to avoid overpaying.
Set a hard stop at −50%
If your contract loses half its value, sell immediately. Don't hope for a recovery on 0DTE.
Never hold a 0DTE past 3:30 PM ET
Time decay (theta) accelerates exponentially in the last 30 minutes. Exit early.
Ready to Trade?
Put your knowledge to work
Head to the Market Tracker for live signals, or use Trade Search to analyze any ticker on demand.