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- 1. Open an Account
- 2. Invest
- 3. Start Trading
A Guide to Online Options Trading
Most investors are well aware of the make or break nature of stock market investing. Besides, you often have to wait endlessly to make a reasonable profit or sometimes end up with losses. However, with online options trading you have a safer and quicker way to make money from trading. You don’t have to be an experienced investor either. These platforms are designed for beginners as well as experienced investors where you can begin with as little as $100.
Getting started in options trading
To trade in the options market you need to have a trading account with an options broker. This will allow you to place options trades and have the broker execute orders on your behalf. You have the choice to open a cash account or a margin account. One of the benefits of a margin account is that you can offer any existing stocks as collateral and borrow funds from the broker. Options Brokers usually have a minimum deposit requirement, which differs amongst brokers while you may need to deposit at least $2000 for a margin account. Trading online allows brokers to handle numerous orders simultaneously. In addition, brokerage firms such as 24Option, iOption, and Anyoption offer user-friendly and highly intuitive platforms that make it easier to place and execute trades even while on the move.
Types of binary options trading
High-Low binary options and Touch-No Touch binary options are the most common trading options. In High-Low binary options you determine whether the commodity will finish ‘in the money’, which is whether your trading agreement will expire with the commodity above or below the purchase price. There is a great opportunity to fetch returns as much as 70% and more if you make the right call. In Touch-No Touch binary trading, you determine whether the commodity will reach a specific price level prior to expiry of the trading agreement. You win a pre-determined return if it touches the level or stand to lose your investment if it does not.
The profit potential of options trading
This type of trading allows you to watch your investment grow significantly even though you may invest in as little as $100 or less. However, it is always prudent to learn the finer aspects of online options trading in order to minimize risks and maximize your profit potential. Take time to visit brokers’ websites and make a note of the types of trading platforms and assets they allow you to trade in. It is also important to learn to trade the options market through a wide range of strategies. This is the best way to discover new trading opportunities and enhance your investment portfolio. Remember, the options trading is a great way to earn significant profits as high as 60 to 120 percent or more in a couple of hours, a day, or a week. However, it is essential to trade wisely or else you could end up losing your investment just as quickly.
An easy way to trade
One of the biggest advantages of trading in options is the high payouts. However, the first step is to choose a reliable broker and then select an asset to trade. Many brokers offer a variety of assets such as Forex, oil, gold, silver, indices, and more. Choose a specific time frame for the contract, which could be an hour, a day, or weeks and set the amount you want to invest. In favorable market conditions you can opt for the ‘Call’ option or a ‘Put’ option if trends indicate that prices are likely to fall. All you do is predict the direction the price of the asset could take.
Finding the best online options broker
As with many types of trading, your choice of broker can spell the difference between success and failure of your investments. It is always prudent to spend time evaluating the quality of their service. You can choose between a full-service and discount broker. Full service brokers offer a wide range of services which includes tools and advice on where to invest your money. On the other hand, discount brokers merely execute your orders and charge a lesser fee as compared to full service brokers. Orion Futures Group is a full service brokerage firm that offers a host of services in options trading. On the other hand, E-Trade Financial, TD Waterhouse, Schwab, Fidelity or Scottrade are some of the popular discount brokers. When it comes to choosing an options broker some of the important factors to consider is the type of platform, its user friendliness, and speed of execution. Look for a broker whose site is available with the least potential for disruptions or else you could miss out on lucrative trading opportunities. Financial trading directories like FinancialBetting.com can also be very helpful that offer both education and trading strategy tips for inexperienced traders. In addition, look for brokers with the best available ask price that meets or exceeds the National Best Bid or Offer (NBBO).
Why options trading may be right for you
When it comes to short and medium term investing, options trading always makes perfect sense to make better use of your investment capital. It allows you the leverage required for short term, speculative online options trading. It can always be used to hedge a long term position against a steep drop in price. Investing in options allows you to profit in an up as well as a down-market as well. It doesn’t matter in which direction the market heads. With a bit of caution and a reliable options broker there is great potential to make the most of your investment.