Robinhood Markets HOOD told users Tuesday that the brokerage will be adding options contracts that expire on Tuesdays and Thursdays. The new daily contracts will be available for Invesco QQQ QQQ and SPDR S&P 500 ETF SPY.
Before Tuesday, users could only trade options contracts that expired on Mondays, Wednesdays or Fridays. Starting Tuesday, users will now be able to pick any day of the week for expiration dates on QQQ or SPY options.
Most stocks have option expiration dates each Friday. Due to high trade volume and demand for QQQ and SPY options contracts, market makers have expanded offerings to give traders more flexibility. Robinhood is partnered with Cboe Global Markets Inc CBOE for its options offerings.
Related Link: Robinhood Is Shining Versus Peers, Analyst Says
What Are Options Contracts? Options contracts are a type of derivative contract that allow traders to buy or sell an underlying security at a predetermined price. So, you could buy a “call” contract that gives you the right to buy a stock at a certain price.
Traders often use options to increase their leverage. Options have become extremely popular throughout the last few years because traders can make more money quicker than with common stock, but options can often be inherently more volatile and risky than buying shares of common stock.
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