How to Make $500 a Day Trading Options on Robinhood

Making $500 a day trading options on Robinhood is a great milestone to hit if you want to increase your income and stack your money.

I've made $500 or more countless times swing trading options during earnings season and key events such as CPI inflation data releases or industry specific triggers.

The best part about this strategy is you don't need a lot of money to get started. You can start trading options with as little as $500 and double your money to hit the $500 per day mark.

Open a Robinhood Account

I use Robinhood for trading options because I like the simple interface and quick settlements. Robinhood only charges a tiny settlement fee for options unlike other brokerages such as Fidelity that charge per options contract.

It's cheaper to use Robinhood because they reroute your trades to a “market maker” like Citadel to keep your costs down.

Deposit at least $500

I recommend depositing at least $500 so you get approved quickly.

If you don't have $500 to invest then get a job or borrow the money from friends or family. Trading options isn't like playing the lottery where you can turn $1 or $2 into $500 quickly. You need some startup capital to make this work without taking on a ton of risk.

Enable Level 2 Options Trading

You need to enable level 2 options trading on your Robinhood account to start swing trading options contracts.

Follow my guide on how to get approved for level 2 options trading on Robinhood if you get denied on your first attempt to setup level 2 options.

Create a Watchlist of Volatile Stocks Under $20

Next step is to start monitoring some potential options trading targets using the Robinhood watchlist feature. We're looking for stocks under $20 because they have more affordable options contracts to trade.

It's more difficult to trade expensive stocks such as Strategy (MSTR), Tesla (TSLA), and Apple (AAPL) using this strategy because the options premiums are more expensive on higher priced stocks.

Unless you have a lot of money to invest, you can only buy 1 or 2 options contracts on expensive stocks.

However, you'll be able to buy 5 to 10 options contracts on cheaper stocks because the premiums are far lower. This is ideal so you can sell off your contracts slowly once the underlying stock moves up or down.

Research Potential Catalysts

I find it easier to make $500 or more in a day during the following time periods:

• Earnings Season: A period when United States companies trading on the NASDAQ or NYSE report their quarterly earnings to the public. Each company reports earnings 4 times per year so you will get plenty of opportunities to buy options before earnings are released.
• CPI Inflation Data: The CPI releases inflation data on the United States economy every month around the 12th. Rising inflation hurts stocks while lowering inflation is usually bullish for equities. You can buy options contracts before the CPI data release data to profit from aftermath volatility in the markets once traders digest the information.
• Bitcoin Volatility: Bitcoin backed stocks such as MSTR, COIN, MARA, CLSK, RIOT, and CEP move sharply whenever BTC goes up or down in price. These companies adopt a Bitcoin treasury strategy so their market cap goes bonkers whenever Bitcoin moves aggressively.

Buy Options Contracts Slightly Out of the Money

Buying options contracts just out of the money gives you a better chance of making more money with less capital.

The more out of the money the contract is, the less chance it will finish “In the Money” and go up in value. Stocks rarely go straight up without traders taking profits along the way.

Take Profits Quickly and Don't Be Greedy

Options are leveraged bets that can make you a lot of money quickly but also cause massive losses just as fast.

I highly recommend taking profits ASAP to lock in your gains and avoid turning a profitable win into a stressful loss.

If you start with $500 then you need a 100% gain in your options contract values to double your money.

This can easily happen if you buy 1 contract for $0.10 then the underlying stock goes up and now the same contract trades at $0.20.