Depending on the options strategy you choose to deploy, you may have stocks or cash held as collateral to make sure you can cover the position in the case of assignment. Here are some examples of when you’d have stocks or cash held as collateral:
Why can’t I sell my shares?
Selling to Open a Covered Call:
- When you sell a call contract, you must have 100 shares of the underlying stock in your portfolio to cover the position. As long as the position is open, you’ll be unable to sell 100 shares of the underlying stock.
Why don’t I have all my buying power?
Selling to Open a Cash-Covered Put:
- When you sell a put contract, we’ll set aside the money from your portfolio you’d need to buy the shares of the contract’s underlying stock at the strike price.
Opening a Credit Spread:
- If you open a credit spread position, we’ll put aside enough cash from your account to cover your maximum loss.
You’ll be able to see exactly what collateral is held on the Stock Detail page of the underlying stock.
When you place an options order, we’ll hold the appropriate collateral (cash or stock) beginning at the pending state. The same way we’ll hold enough cash to fill your pending order when you open an equity position, we’ll hold enough cash or stocks to cover your option position until the order is cancelled.
Please Note: Options transactions may involve a high degree of risk. To learn more about the risks associated with options trading, please review the options disclosure disclosure document entitled the Characteristics and Risks of Standardized Options available through Robinhood Financial LLC or The Options Clearing Corporation.