Options Trading

[Education] Options Trading

Options are financial derivatives, so they receive their value from an underlying asset or security. Traditional options give buyers the ability, though not the obligation, to transact in the underlying security at a predetermined price called the strike price, by date of expiration or the end date of the contract. Options have a premium attached to them, meaning they have an upfront fee.

A binary option is a financial exotic option in which the payoff is either some fixed monetary amount or nothing at all. The two main types of binary options are the cash-or-nothing binary option and the asset-or-nothing binary option.

The former pays some fixed amount of cash if the option expires in-the-money while the latter pays the value of the underlying security. They are also called all-or-nothing options, digital options (more common in forex/interest rate markets), and fixed return options (FROs) (on the American Stock Exchange). – Wikipedia

A digital option is a type of options contract that has a fixed payout if the underlying asset moves past the predetermined threshold or strike price. There’s an upfront fee called the premium for digital options, which is the maximum loss for the option.

Unlike traditional options, digital options don’t convert or exercise to the underlying asset’s shares. Instead, they pay out a fixed reward if the asset’s price is above or below the option’s strike price. Digital options are also referred to as a “binary” or “all-or-nothing options.” – Investopedia

EDUCATION [OPTIONS TRADING]

What is Options Trading? How does it Work?
What is Options Trading? How does it Work?

Options trading allows you to buy or sell stocks, ETFs etc. at a specific price within a specific date. This type of trading also gives buyers the flexibility to not buy the security at the specified price or date. Options can help you make relatively larger profits if the price of the security goes up.

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What is Options Trading? How does it Work?
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Options trading allows you to buy or sell stocks, ETFs etc. at a specific price within a specific date. This type of trading also gives buyers the flexibility to not buy the security at the specified price or date. Options can help you make relatively larger profits if the price of the security goes up.

read more

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Risk Warning

Trading in the financial markets (including trading on margin) provides a wide range of opportunities and enables investors who are ready to take risks to make high profits. However, it carries a potentially high level of risk of loss at the same time. You should never invest money that you cannot afford to lose. Therefore, prior to trading you should take into careful consideration whether such operations are suitable for you in terms of your level of knowledge and financial situation. Your due diligence and education on Trading & Investments is therefore highly recommended.