ADVFN Logo ADVFN

We could not find any results for:
Make sure your spelling is correct or try broadening your search.

Trending Now

Toplists

It looks like you aren't logged in.
Click the button below to log in and view your recent history.

Hot Features

Registration Strip Icon for pro Trade like a pro: Leverage real-time discussions and market-moving ideas to outperform.

Options are financial instruments giving the holder the right to buy or sell an underlying asset at a set price, known as the strike price, within a determined time period – but the holder is not obliged to buy/sell the asset. The underlying asset can be stocks, bonds, commodities, currencies or other derivatives.

There are two types of options, call options and put options.

  1. Call options: A call option gives the holder of the option the right to buy the underlying asset. The holder would use a call option if they expect the price of the underlying asset to rise before the expiration date, so they can profit from the difference between the strike price and the market price.
  2. Put options: A put option gives the holder of the option the right to sell the underlying asset. This is used if the holder think the price will go down before the expiration date, so they can make a profit by selling the asset at the higher strike price and buying it back at the lower market price.

There are a number of advantages to trading in options, such as:

  1. Flexibility: There are many different strategies that can use options to profit from varying market conditions including bull and bear markets.
  2. Leverage: Potential gains can be magnified using leverage to control a larger position in the underlying asset with a small investment. However this also means losses will be magnified as well.
  3. Risk Management: Traders can use options to hedge against potential losses in a portfolio, for example by taking out put options on a stock they own to protect against its value declining.

Like many financial instruments, trading options involves risk and investors you make sure they understand the options market, as well as the details of the underlying asset. Options prices are influenced by many factors including the price of the underlying asset, time to expiration, volatility, interest rates, and market conditions.

How To Trade Options

Options are a complicated financial instruments so to trade them you need to understand how they work, understan...

What Is An Options Market

An options market is the part of the financial market where options contracts are bought and sold, with traders ...

What Is An Options Contract

An options contract is a financial agreement between two parties that gives the buyer, or holder of the contract...

What Is An Underlying Asset

An underlying asset in an options market is the financial instrument that the options contract is based upon. It...

Options Flow

Options flow is a trading tool used to analyze the buying and selling of options contracts in the market. It pro...

What Is Single Leg Options

In options trading, a leg is the name for the individual component options which together make up your options s...

What Is Options Sweep?

In options trading, a sweep is typically a large order that is broken into several different smaller orders that...

The Difference Between Open Interest And Volume

In options trading, two of the most commonly used metrics when analysing the market are open interest and tradin...

What Is The Difference Between Single Leg And Multi Leg?

Single leg option is a very basic strategy for options trading in which the trader executes a single option – bu...

What Are The Different Kind Of Multi Leg Options?

Multi leg option strategy combines different kinds of options with each other to create a complex strategy in wh...

Best Forex Brokers

  • Access over 17,000 markets to trade
  • Trade quickly and smoothly, with technology designed to ensure that your deal goes through
  • Free trading courses and webinars
  • Round-the-clock support 24 hours a day, from 8am Saturday to 10pm Friday

70% of retail investor accounts lose money when trading CFDs with this provider.

Min Deposit:£250 by credit/debit card and PayPal
  • We're regulated in 7 jurisdictions including with the FCA in the UK
  • Access razor sharp spreads from 0.0 pips* and top tier liquidity
  • 99.99% fill rate*, fast execution and no dealing desk intervention
  • Choose from 4 world-leading platforms, including MT4/5 & TradingView

75.3% of retail investor accounts lose money when trading spread bets and CFDs with this provider.

Min Deposit:No Minimum Deposit
  • Over 4,700 instruments to trade
  • Social features, including copy trading
  • Smart Portfolios (ready-made thematic portfolios)
  • Free $100,000 demo account

51% of retail investor accounts lose money when trading CFDs with this provider.

Min Deposit:$100
Mobile App: Yes
Categories: