A little-known business at Robinhood has exploded, and now it's launching a service to go after the most serious traders

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Robinhood's options-trading business is exploding, according to Chris O'Neil, a product manager at the California broker.
Now the firm, which says it has seen $2 billion in options-trading volumes since launch, is upping the ante with the rollout of multileg options.
The move shows the company is seriously going after the business of more experienced traders, says Devin Ryan, an analyst at JMP Securities.

When most people think about Robinhood, free stock trading and its red-hot crypto feature typically come to mind.

But Robinhood also has a lesser-known options-trading business, which it launched late last year and is growing fast.

The firm has clocked in over $2 billion in options volumes, making it one of the largest platforms offering exposure to the market, said Chris O'Neil, a product manager at Robinhood responsible for the firm's options business.

Robinhood is now rolling out multileg options, which allow traders to engage in more advanced strategies tied to options.

"We ended up doing it before we thought we would because it was the biggest request from our options users, which put a priority to roll it out," O'Neil told Business Insider.

Options don't get the same attention on Main Street as stock trading, but they make up a huge market on Wall Street. An option allows an investor to buy or sell an asset or security — say a stock or a currency — at a certain price at a specified date in the future. Options allow investors to bet on the price of an asset in the future or to hedge their bets elsewhere against an unexpected price swing. Competitors, such as TD Ameritrade and Fidelity, charge customers more than $4 for each contract.

The rollout of multileg options is the latest in Robinhood's evolution as a company. It made a splash when it said it would dive into cryptocurrency trading earlier this year. So far, over 1 million people have signed up for the service. Robinhood also launched a new web platform in November, and it also started letting users transfer stock from competing brokerages to its platform.

The move to support multileg options shows the company is seriously going after the business of more experienced traders, says Devin Ryan, an analyst at JMP Securities.

"Active traders are an valuable customer base for the industry and they represent a bigger driver of activity in the more sophisticated products, like multi-leg options, which Robinhood appears to be expanding into," Ryan said in an email.

In total, the company counts over 4 million registered users. The company has not revealed, however, how much money they have with it. It is also unclear whether the company is profitable.

Robinhood most recently raised $363 million in a series D round, valuing the company at $5.6 billion in May.

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