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

Core Insights - Robinhood stock is currently trading approximately 17% below its all-time high of 153.86, yet it remains a favored choice among option traders, indicating potential buying support [1][7] - A long-term bull put spread strategy is being considered, which allows for defined risk and potential profit if the stock trades sideways or slightly lower [2][3] Stock Performance and Options Strategy - As of Wednesday, Robinhood stock is priced around 127, with a proposed bull put spread involving selling a 100-strike put and buying a 95-strike put, trading at approximately $1.35 per contract [3] - The potential return on this spread could be around 37% over four months if the stock remains above 100 at expiration, with an 80% chance of the 100-strike put expiring worthless [4][5] Risk Management - The maximum loss for this trade would occur if Robinhood stock closes below 95, resulting in a loss of $365, while the break-even point is calculated at 98.65 [5][6] - It is advisable to set a stop loss if the stock drops below 110, limiting potential losses to the premium received of $135 [6] Company Overview - Robinhood is recognized for its commission-free trading platform and has received high ratings, including a Composite Rating of 95 out of 99 from Investor's Business Daily [7] - The company has disrupted traditional brokerage models since its founding in 2013, attracting millions of retail investors through mobile access and fractional share investing [7]