Robinhood Stock: Set Sights On A 37% Return With Long-Term Spread Trade

Robinhood (captured) It’s nearly 17% below its all-time high of 153.86, but it’s still a highly-rated stock that’s popular among options traders. Its online trading platform shares It has shown signs of buying support in recent days, suggesting that Robinhood stock may not fall much between now and early 2026.

When it comes to options, we typically look at short-term trades, anywhere from one week to one month. However, this trade Bull spread is seen over the long term.

Robinhood Stock: Creating a Long Term Bull Market Spread

Long-term options trades tend to move a little slower than short-term trades. This allows more time to adjust or close, but also means a lower annual return.

As a reminder, the bull spread is a risk-limiting strategy, so you always know the worst-case scenario in advance. This type of trade will make a profit if Robinhood stock trades sideways or up and sometimes even if it trades slightly lower.

With Robinhood stock trading around 127 on Wednesday, if we used options expiring on March 20, 2026, we could sell the 100 put and buy a put at 95 to set up a bull spread. This spread recently traded at around $1.35 per lot of contracts, or $135. Selling this spread would generate a premium of approximately $135 with a maximum risk of $355.

If the spread expires worthless, that would be a return of about 37% in four months, provided Robinhood stock is above 100 at expiration. This seems like a very reasonable bet.

The 100th strike has a delta of 20, meaning it has roughly an 80% chance of expiring worthless.

The maximum loss will occur if Robinhood stock closes below 95 on March 20. The outstanding seller will lose $365 on the trade. The break-even point for the trade is 98.65, which is calculated as 100 less the 1.35 option premium received per contract.

It is wise to set an adjustment point or stop loss if Robinhood stock drops below 110. Otherwise, another good rule of thumb is to limit the loss to the amount of the premium received, which in this case would be $135. Sticking to this stop loss level will help avoid big losses if the trade goes south.

Robinhood Stock: Valuations in Everyday Investor Actions

Robinhood is a US-based financial technology company best known for its commission-free trading platform for stocks, ETFs, options, and cryptocurrencies.

Investor’s Business Daily gives Robinhood stock a… Composite evaluation Of 95 of the best 99 possible, and Earnings per share rating From 81 and a Relative strength rating Of 96. According to IBD inventory checkRobinhood Markets ranks fourth in its group.

Founded in 2013, it changed traditional brokerage models by providing easy mobile access and fractional equity investing, attracting millions of retail investors. The company also generates revenue through payment for order flow, margin lending, and premium subscription services like Robinhood Gold.

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Please remember that options are risky and investors can lose 100% of their investment.

This article is for educational purposes only and is not a commercial recommendation. Always remember to do your due diligence and consult your financial advisor before making any investment decisions.

Gavin McMaster holds a Master’s degree in Applied finance and Investment. He specializes in income trading using options, and is conservative in his style. He also believes that patience in waiting for the best settings is the key to successful trading. Follow him on X/Twitter at @OptiontradinIQ.

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