Are you looking to close an option contract on Robinhood but not sure how to go about it? In this article, we’ll guide you through the steps to successfully close your option contract on the popular investment platform.
Before we begin, it’s important to understand what an option contract is. An option contract is an agreement between a buyer and a seller that gives the buyer the right, but not the obligation, to buy or sell an underlying asset at a predetermined price and time. When the buyer exercises their option, the seller is obligated to sell or buy the underlying asset.
Now, let’s dive into the steps to close your option contract on Robinhood:
Step 1: Navigate to the Options Tab
Once you log in to your Robinhood account, navigate to the Options tab on the bottom of the screen. Here you’ll see all your open option positions.
Step 2: Select the Option You Want to Close
Select the option you want to close to view its details. Here you’ll see the option’s strike price, expiration date, and other important information.
Step 3: Click on the ‘Sell’ Button
Once you’ve selected the option, click on the ‘Sell’ button on the right-hand side of the screen.
Step 4: Enter Your Price and Quantity
You’ll be prompted to enter the price and quantity at which you want to sell your option. The price should be the current market price, and the quantity should be the number of contracts you want to sell.
Step 5: Review and Submit Your Order
Review your order summary to make sure everything is correct. If all looks good, hit the ‘Review’ button to confirm your order. Once you’ve reviewed your order, click the ‘Submit’ button.
And there you have it! Your option contract on Robinhood is now closed.
Closing an option contract on Robinhood is a simple process that can be done in just a few steps. Remember to keep an eye on your open option positions and market conditions to make informed decisions about when to exercise or close your options. Happy trading!
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