What are Options
At first sight, the name options may seems too complicated for anyone not acquainted with financial markets. But the truth is that it is the simplest tool for earning money compared to any other financial instruments, such as stock market or Forex. So, what are options? They were specifically developed to provide common people with a chance of making cash in their past-time. You can just log in into your browser and push one of two buttons and earn cash on “all-or-nothing” options.
To enjoy the underlying beauty of options trading we should firstly look at how investing is done in other markets, such as Forex. There you invest in an asset such as currencies with a goal of its value substantially changing in either direction. The more the price moves in your direction the more profit you can get. As for the stock-exchange traders buy various stocks with a goal to see its price rise and then sell it off and fix a certain profit. These markets require constant monitoring of changes and have a drawback, which is that if the price doesn't move in the right direction considerably, your profit would be slim.
How trading Options works?
In the Options market you should simply choose the direction and time-frame. It really does not matter if the price changes for only 0.01 % or spikes 10%, your profit and loss is fixed before you execute your investment. Magnitude of price changes are of no concern. It is a simplified and very profitable method of trading options assets.
Actually, options mean “having two parts” and, generally speaking, you simply need to choose a direction, either up or down. But in order to do that you should choose your asset. It can be a currency pair like EUR/USD, or Apple stock, or Brent Oil, if you prefer it. To be precise, you have a choice of Indices, Currencies, Commodities and Stocks.
How to be a good trader
In order to know how to be a good trader, as in any other discipline, you should firstly learn how to make profitable trades. A good tool for that is a demo account offered by some options brokers, so that you can take your time and get used to options trading without any investments. After you are successful, you can make a deposit and start earning bit by bit. There are many resources on our web-site to pump up your skills, such as e-books, trading articles, market analysis, videos with professional traders, trading community discussions etc.
But before that you should also choose a platform and broker with whom you will execute your trades. Trading options, variety of assets, deposit and withdrawal options, safety of funds an many other things should be considered when making your choice. More on this topic can be found in our Brokers section.