Investing in Options (An Education on How to Make Money Trading)

Binary Options for Dummies – Know All About Options Trading – CFDStocks August 25, The exciting part of binary trading is that you do not need any experience or understanding in order to be successful and trade profitably.

Trading options not only requires some of these elements, but also many others, including a more extensive process for opening an account. There are some advantages to trading options.

Buying Calls (Long Call)

Options trading can be complex, even more so than stock trading. When you buy a stock, you decide how many shares you want, and your broker fills the order at the prevailing market price or at a limit price.

For more information on the best options brokers, read our detailed roundup to compares costs, minimums and other features. Or answer a few questions and get a recommendation of which ones are best for you. In order to place the trade, you must make three strategic choices:. This determines what type of options contract you take on. A call option is a contract that gives you the right, but not the obligation, to buy a stock at a predetermined price called the strike price within a certain time period.

A put option gives you the right, but not the obligation, to sell shares at a stated price before the contract expires. If the stock does indeed rise above the strike price, your option is in the money. If the stock drops below the strike price, your option is in the money. Option quotes, technically called option chains, contain a range of available strike prices. The price you pay for an option has two components: The price you pay for an option, called the premium, has two components: Intrinsic value is the difference between the strike price and the share price, if the stock price is above the strike.

Time value is whatever is left, and factors in how volatile the stock is, the time to expiration and interest rates, among other elements. Every options contract has an expiration date that indicates the last day you can exercise the option. Your choices are limited to the ones offered when you call up an option chain. Expiration dates can range from days to months to years. Daily and weekly options tend to be the riskiest and are reserved for seasoned option traders.

For long-term investors, monthly and yearly expiration dates are preferable. Longer expirations give the stock more time to move and time for your investment thesis to play out. A longer expiration is also useful because the option can retain time value, even if the stock trades below the strike price. If a trade has gone against them, they can usually still sell any time value remaining on the option — and this is more likely if the option contract is longer.

Options trading can be complicated. That education can come in many forms, including:. How to open a brokerage account. Reliable customer service should be a high priority, particularly for newer options traders. Consider what kind of contact you prefer. Does the broker have a dedicated trading desk on call? What hours is it staffed?

What about representatives who can answer questions about your account? Even before you apply for an account, reach out and ask some questions to see if the answers and response time are satisfactory.

Options trading platforms come in all shapes and sizes. They can be web- or software-based, desktop or online only, have separate platforms for basic and advanced trading, offer full or partial mobile functionality, or some combination of the above.

Check to see if the fancy stuff costs extra. For example, most brokers provide free delayed quotes, lagging 20 minutes behind market data, but charge a fee for a real-time feed. Similarly, some pro-level tools may be available only to customers who meet monthly or quarterly trading activity or account balance minimums.

But because commissions provide a convenient side-by-side comparison, they often are the first things people look at when picking an options broker. Of course, the less you pay in fees the more profit you keep. Platform fees, data fees, inactivity fees and fill-in-the-blank fees can easily cancel out the savings you might get from going with a broker that charges a few bucks less for commissions. Die meisten Menschen wissen, dass Devisen ist eine Aktivität, die den Austausch von Währungspaaren zu einem einzigen Zeitpunkt beinhaltet.

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