An option is a contract which allows you to buy or sell a specific asset at a certain price on a certain day. Similar to stocks and bonds, an option is a security.
Introduction to Options Trading
Want to know what is options? We have the answers!
Option trading can be performed with the services of online option trading brokers. Options trading should not be confused with futures trading. There are not only differences in instruments but also in the overall features.
Option trading allows you to trade options offered on stock, commodities, indices and forex instead of trading stocks (or other mentioned assets) themselves. In other words, in order to trade options, you do not have to own any underlying assets.
With options you have 2 choices – CALL and PUT. With strategic understanding of both choices, you have an access to unlimited possibilities and high profits.
CALL and PUT provides profits for both up and down price movements. In fact, you can even profit if the asset stays still!
Advantages of Options
Options trading provide powerful simplicity and a financial freedom full of possibilities. You get make up to 500% profit in the matter of seconds. That cannot be achieved if you have bought stock itself.
Options can be used as hedging tool, since it is a great way to profit with the minimal redefined risk.
When stock goes against you, use option trading to decrease the losses. How? With options the possible loss is limited to the price you initially invested. You can protect your number of stock shares from undesirable drop by buying the same number of put options.
No matter where the asset takes you, options trading offer you the profits for every possible move. Up, down or stay still – you can make money without risking margin calls and enjoy the wonders of options trading.
Where to Start?
Go over our detailed reviews of binary options brokers and open an account with one of them. Practice makes perfect so rehearse your options strategies with small investments and increase as your experience grows.
While some investors are still stuck with mutual funds, stocks and bonds, you have an amazing opportunity to enter the new era of making money. Choose options and give yourself a gift of sophisticated investment.
You asked what are options? Here is a simple answer – you are in control of the situation. Options can be as speculative or as conservative as you choose it to be. You have a power to protect the position from a decline or outright bet on the movement! With options, you are the boss.