Robinhood – How to enroll in Options Trading, Fractional Shares, and DRIP | Beginner's Guide

📈Support this new channel and subscribe: ➜ Subscribe: https://bit.ly/Finance101YouTube

💸Sign up for Robinhood and get a free stock! - https://bit.ly/3jdM5DT

Visit my blog and see more videos on other financial matters: http://blogs.harvard.edu/edcervantes/
--------------------------------------------------------------------
00:00 Intro
00:26 Sign up for Robinhood
01:07 Fractional Share Investing
02:10 Dividend Reinvestment Plan
02:41 Tax implications and 1099-DIV
03:08 Options Enrollment
03:47 Tips for Trading
05:27 Intro to Calls and Puts
07:37 Transferring Your Portfolio to Another Brokerage
08:07 Free Stock
08:14 SMART (End of Video)

• Intro to Options
What are [stock] options, and how do they work?
Call options are the most popular options. Calls give you the right, but not the obligation, to BUY 100 shares of a stock at that call's strike price by a specific date. You can "call" or "exercise" your option when the market price of the underlying stock exceeds the strike price (plus the cost of the option, i.e., "premium"). In simpler terms, calls allow you to buy 100 shares at a discount which you can immediately sell for a profit.
Put options work in the opposite direction. Puts give you the right, but not the obligation, to SELL 100 shares of a stock at the strike price by a specific date. You can "exercise" your put option when the market price falls below the strike price (minus the premium) because you are selling your stock at a profit.
Robinhood gives you the break-even point, strike price, and expiration date for each option.

• What is a strike price?
A strike price is a pre-agreed price that you can buy 100 shares when exercising your call option. You are not obligated to buy(call) or sell(put), but another party is obligated to buy from you or sell to you as long as you exercise your option anytime before the expiration date.

• Note: You can only buy options for a batch of 100 shares of the underlying stock in Robinbood.

• What is meant by underlying?
The underlying is the stock itself upon which options trade.

• What is the dividend reinvestment plan (DRIP)?
DRIP is an investment option in which your dividends automatically reinvest into the underlying company that provided those dividends. Rather than receiving cash dividends, you receive more shares or a fractional share of the company.

What is a 1099-DIV?
Robinhood, as well as your bank, provide you with a 1099-DIV for any interest paid, dividends, capital gains distribution, or foreign taxes paid for any taxable investments.

• Should I buy ITM or OTM calls?
An ITM call may be less risky than an OTM call, but it also costs more. If you only want to stake a small amount of capital on your call trade idea, the OTM call may be the best, pardon the pun, option.

No content of this video should be considered advice. It is purely for educational and entertainment purposes.

Видео Robinhood – How to enroll in Options Trading, Fractional Shares, and DRIP | Beginner's Guide канала Finance 101