If you trade options on Robinhood, you accept full responsibility for any losses, which can be greater than your initial investment, and confirm you have read the OCC options disclosure.
By agreeing to this clause, consumers accept sole responsibility for potentially unlimited losses from options strategies such as selling naked calls, even though Robinhood's interface design has been scrutinized for encouraging inexperienced investors to engage in complex options trading. Robinhood paid $70 million to FINRA in 2021 partly over options-related harm to retail customers.
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Compare across platforms →Options trading can result in losses that exceed what you originally invested, and this clause places complete responsibility for those losses on you — Robinhood's gamified app design has been criticized for making complex options strategies too accessible to inexperienced investors.
REGULATORY FRAMEWORK: Options trading disclosures are governed by FINRA Rule 2360 (Options), which requires broker-dealers to deliver the OCC's 'Characteristics and Risks of Standardized Options' document prior to account approval. FINRA Rule 2111 (Suitability) and Reg BI's care obligation require that options account approvals be based on reasonable diligence into customer financial sophistication and risk tolerance. The SEC's National Market System (Reg NMS) and options-specific rules under Securities Exchange Act Section 9(b) also apply. FINRA Regulatory Notice 21-15 specifically flagged options approval practices at digital broker-dealers as a priority examination area.
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