Options trading

Options trading

The power of vanilla options lies in their versatility. They allow a trader to adapt or adjust his positions in the financial markets according to the current situation.

Binary options have the advantage of reducing the emotional aspect of trading and being easy to understand. However, they can appear to be nothing more than basic, highly speculative bets.

Options are complex derivative instruments, some options trading strategies may be conservative while others may be speculative in nature, with a substantial risk of loss.

Whether they are used to hedge foreign exchange risks or to speculate, most multinationals and trading professionals use options in one shape or another.

The following sections present the basic principles of binary and vanilla options trading. Keep in mind that most options traders have many years of experience, you cannot become an expert immediately after reading these articles.

Binary option

Binary options

Binary options are known for their ease of use. The trader bets on the ending price of a currency pair or a stock at the end a predefined period of time.

Forex vs binary options

The difference between forex trading and binary options

Although binary options are easy to use, this doesn't mean that they're ideal for beginning traders, they're actually better suited to those with a bit of trading experience.

Vanilla Options

Vanilla options

This article discusses how standard "call and put" options work. They are also called vanilla options, and they have been available on the major exchanges since 1973.

Warrants and options

Warrants and call options (options to buy)

Warrants and call options are securities that provide their holders with the right - not the obligation - to purchase a share at a fixed price over a predetermined period of time. What are the differences between these 2 trading instruments?

Quadruple witching day

Quadruple witching day

The quadruple witching days are the quarterly expiration days of four derivative products: options on indices, stock options, futures on indices and stock futures.

Option expiration calendar

Option expiration calendar

Some options expire on the third Friday of each month (these are known as Triple witching Fridays). These Fridays are usually quite volatile, especially at the end of the quarter (Quadruple witching days).