Robinhood Stock: 37% Return Strategy with Long-Term Bull Put Spread (HOOD Options Trade) (2026)

Imagine eyeing a stock that's hovering well below its peak price, yet buzzing with enthusiasm from traders worldwide—sounds like a tantalizing opportunity, right? But here's where it gets controversial: Could betting on Robinhood with a long-term options strategy really deliver a 37% return without breaking the bank, or is this just another risky gamble in the volatile world of trading? Stick around, because diving into this long-term bull put spread might just reveal the secrets to patient, profitable investing that most day traders overlook.

Robinhood (HOOD) is currently trading about 17% lower than its all-time high of $153.86, yet it remains a favorite among options traders for its strong ratings and widespread appeal. The online trading platform has recently shown encouraging signs of buying support, indicating that Robinhood stock might hold steady or even creep higher through early 2026, rather than plummeting further.

Usually, when we discuss options strategies, we focus on quick wins—trades lasting from a week to a month. However, this particular setup shifts gears to a more extended timeline, embracing a long-term bull put spread. And this is the part most people miss: Longer-term options moves unfold more gradually, giving you extra breathing room to tweak or exit the position, though it often comes with a gentler annualized return compared to short-term plays.

Let's break down what a bull put spread is for beginners: Think of it as a bullish options strategy with built-in protection. You're selling a put option (which gives the buyer the right to sell the stock at a certain price) and buying another put at a lower strike price to limit your downside. This defined-risk approach means you know exactly how much you could lose upfront—no surprises there. The beauty? It profits if the stock stays flat, rises, or even dips a bit. For instance, imagine you're a homeowner betting on your property value holding steady; a bull put spread is like hedging that bet with a safety net.

With Robinhood stock around $127 as of Wednesday, let's explore a concrete example using options set to expire on March 20, 2026. You could sell a put option with a $100 strike price and simultaneously buy one at $95, forming the bull put spread. This combo recently traded for about $1.35 per contract pair, or $135 total. By selling this spread, you'd pocket roughly $135 in premium, facing a maximum risk of $355 per set.

If the spread expires without value—meaning Robinhood closes above $100 on that date—you'd keep the full premium, netting around a 37% return in just four months. That seems like a smart wager, especially given the stock's recent resilience. To clarify, the $100 put has a delta of 20, which roughly translates to an 80% probability of it expiring worthless (out of the money). In simpler terms, delta measures how much the option's price might change with a $1 move in the stock—lower delta means less sensitivity, boosting your chances here.

Of course, every strategy has its pitfalls. The worst-case loss of $365 would hit if Robinhood dips below $95 by expiration, with the buyer of your put exercising it. Your break-even point sits at $98.65, calculated by subtracting the $1.35 premium from the higher strike ($100). But here's the controversial twist: Some traders argue long-term options like this blur the line between investing and gambling, especially with volatile stocks like Robinhood tied to market sentiment. What do you think—is this a disciplined approach or just chasing returns in a casino-like environment?

To manage risk wisely, consider setting a stop-loss or adjustment trigger if Robinhood falls below $110—perhaps by rolling the spread to a later date or closing it. A solid general rule is capping losses at the premium earned, here $135, to prevent bigger drawdowns if things turn sour. This conservative stance helps preserve capital, aligning with patient trading philosophies.

Robinhood, headquartered in the U.S., is a fintech giant famous for its zero-commission platform covering stocks, ETFs, options, and even cryptocurrencies. It revolutionized investing by enabling fractional shares and mobile-first access, drawing in hordes of everyday traders since its 2013 launch. Revenue streams include fees from payment for order flow (where market makers pay for trade data to match buyers and sellers, potentially benefiting Robinhood's ecosystem) and services like margin lending or premium subscriptions such as Robinhood Gold.

Per Investor's Business Daily, Robinhood earns a stellar Composite Rating of 95 out of 99, an Earnings Per Share Rating of 81, and a Relative Strength Rating of 96. In IBD's Stock Checkup, it ranks fourth in its sector, highlighting its growth potential. But let's be real—this high praise sparks debate: Is Robinhood's model sustainable in a competitive fintech space, or are its ratings overly optimistic given past controversies like trading halts during volatility spikes?

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Remember, options trading carries significant risks; you could lose your entire investment, so approach with caution. This piece is purely educational and not a direct trade suggestion. Always conduct thorough research and chat with a financial advisor before diving in.

Gavin McMaster holds a master's in applied finance and investment, specializing in conservative income strategies via options. He emphasizes patience for prime setups. Catch his insights on X/Twitter at @OptiontradinIQ.