Put And Call In Options Trading

By Author: alexander
Total Articles: 10
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The article is related to the option trading strategy, and it helps to understand the put and call options in a better manner. The trader also opened an account with ETFinance for taking better trading experience in the market.

What is options trading?

The options trading in which the investor buys or sells an asset on an advance price set in a specific period of time. The options trading asset may be in the form of commodity, ETF, security.

What is the key power of options trading?

Less risky than equities: The options trading is less risky compared to the equities.

Higher return: In options trading, the return will be higher because it has less risk, and the broker offers leverage, increasing the actual trading amount.

Alternative option: It is the major advantage to trade in options trading because in which the trader has a lot of choice for the investment. There are thousands of options to create other positions in trading.

Buying calls-

They utilise leverage ...
... and take advantage of rising prices.
Confidence is much needed on a particular stock, index or ETF (limit risk)
The options are leverage, i.e., The traders allow to increase the benefit by the risk-taking a smaller amount than otherwise it will be required in trading under the asset itself. In the standard options, 100 share control in the underlying security.

(profit /loss): The potential loss from a long call is limited to the premium paid. The profit is unlimited, the option pays off, then the hidden asset price until expiration, and there is no limit to how high the price.

Covered call

A covered call serves as a short term result on a long stock, and the investor allows to earn the income through premium (through the writing the option). When the trader sells the call, it collects the premium and lowers the cost depending on the market.

Buying Puts

Bear on a particular stock, index or ETF, but if you want less risk than with a short-selling strategy.
Take advantage of falling prices by utilising leverage.

The put option and call options work opposite, but the put option gaining value as a hidden asset price decreases. On the other hand, short selling also allows traders to get some profit from falling prices; theoretically, the price is high, there is no limit how much price is raised (put option)
(profit /loss): The loss is limited as compared to the premium for the options. The main profit from the position is seized, the hidden price cannot drop below zero. In the long call option, the traders return the leverages(in the put option).

What is the put option?

The put options in which the investor buys if the asset's price falls in a particular period of time.

What are the advantages of Hedging input options?

It reduces the risk of price decline.
This trading doesn't require margin money.
The broker provides the leverage amount to the traders.
Buyer will be easy to access the market.
In this trading, the trader has the flexibility to cancel the trade.

What is a call option?

The call options in which the investor buys if the asset's price rises in a specific period.

What are the advantages of Hedging in call options?
It can protect from price increases.
It can also benefit from the price declines.

How to start the options trading?

Open a trading account of the traders.
Fill the application form under the ETFinance broker: It is the best broker in the market with its amazing facilities.
Then you fill the questionnaire for trading in ETFinance in which you have answers related to the trading goals and plan.
After this process, the trader has to verify their documents on the platform to start the trading. The trader has to verify their government ID to prove themselves.
Finally, the trader has to deposit the initial amount of trading and invest the actual amount in trading.

Select the best broker for trading

ETFinance

ETFinance is authorised and regulated by the Cyprus Securities and Exchange Commission (CySEC), and it is a brand name of Magnum Fx (Cyprus) Ltd. the broker offers 250+ CFDs instrument on assets like cryptocurrency, forex, commodity, stocks and metals. The platform provides educational material to the traders, such as articles, courses, ebooks, tutorials and VOD. It is the best platform that provides amazing features and services to the trades.

PrimeFin

The platform is authorised and regulated by the Labuan Financial Services Authority (FSA). It is the brand name of Caps solution Ltd, and the registration number is 12734767. The broker is also a member of the Investor Compensations Funds (ICF). The broker is completely safe for trading, and all the traders of the platform are satisfied with the platform services.

Conclusion

The articles are all about the options trading strategy and especially talk about the put and call option of trading. And the best broker in the market with their amazing services.