Table of Contents1 Trading Options as an Amateur 1.1 What Is Forex and How to Trade? 1.2 What Is Options Trading and How to Start? 1.2.1 Is Options Trading Like Gambling?1.2.2 Options Trading Terminology1.2.3 When Am I Ready for Real Options Trading? Trading Options as an Amateur Options Trading is a kind of online trading similar to […]
Table of Contents
Trading Options as an Amateur
Options Trading is a kind of online trading similar to the Forex market. This term contains excessive information that can’t be explained in a few words.
Options Trading can be defined as a way of online investment for a fixed return with a fixed expiration period. It has gained huge popularity in the last couple of years, mainly because of its simplicity and appeal. To understand it first, you should get familiar with the Forex market.
What Is Forex and How to Trade?
Forex means Foreign Exchange. In the Forex market, you will buy/sell currencies. This is a common description of the Forex Market. But today, Forex market trading is a kind of online trading. Some companies offer you to trade in the Forex market, and the traders call them Forex Brokers.
Forex is like the Stocks market. Nowadays, a lot of Forex Brokers offer their clients trading on Stocks, Energies, and metal markets too. Like stock markets in the Forex market, you can trade currency based on what you get about the currency value, but the main difference with Forex is that you can Sell or Buy just as easily. If you predict that a currency will increase in value, you can buy it.
If you think it will decrease, you can sell it. On the Forex market, you should choose symbols for trading. You can’t buy one currency and exchange it for your currency. For example, you can’t Buy GBP (British Pound) and convert it to AUD (Australian dollar), JPY (Japanese Yen), and Or USD (Us Dollar).
In the Forex market, you should choose your symbols in the beginning and the symbols defined in Forex broker like these: EURUSD, GBPUSD, AUDUSD, USDCHF, GBPJPY, NZDUSD, etc. (we call them symbol). For instance, you choose EUR/USD for trading. It means that if you buy EUR/USD, you should convert it to USD when you decide to sell the EURO. You are not allowed to change it to GBP or JPY.
When you choose your symbol to trade, you have two options for trading Buy/Sell. If you think the EUR value will decrease against the USD, you can sell EUR/USD, and if you think the EUR value will increase against the USD, you can buy EUR/USD.
What Is Options Trading and How to Start?
On Options Trading, you can trade on Forex symbols like EUR/USD or GBP/USD or USD/CHF, but you should predict the market aim when it looks like a bet on the Forex market!
In Options Trading, we say Call orders and Put orders. In fact, call on Options Trading means Buy and Put means Sell. There are two big differences between the Forex market and the Options market: 1-In the Forex market, you can hold your orders for a long time and close it every time you like.
But On Options Trading, you have an expiration time. You can’t close or modify your orders until the expiration time. 2- In the Forex market, your profit and loss are not fixed and depend on the market movement, but in Options Trading, your profit and loss are fixed. The options broker offers you a fixed return if you guess market movement correctly.
For example, CloseOption.com offers you up to 85% on EURUSD if you guess market movement accurately. Now maybe you think this is a pure gambling system, and it’s not trading! Here I want to describe this question: https://www.closeoption.com/blog/compare-forex-competition-options-contest/
Is Options Trading Like Gambling?
No. In gambling, you should use mathematical possibility, and gambling is not predictable at all. But Options Trading symbols are Forex trading symbols, and all financial markets are predictable if you have enough knowledge to analyze markets. How can you gamble on Options Trading or the Forex market?
It’s your choice whether you enjoy trading by chance or by knowledge and experience. As you can see, the CloseOption web platform is very easy and straightforward.
Get familiar with the CloseOption Platform
As you can see that the CloseOption web-based platform is very simple and straightforward.
Options Trading Terminology
Real Account: The account to which you deposit real money to trade.
Demo Account: This is a practice account, and the numbers in the balance are fake, not real money.
Put or Low Option: Sell Symbols Call or High Option: Buy Symbols Balance: Total money in the broker.
Broker: A company, Brokerage, or Website that allows you to trade Options.
Current rate: it represents the current price of the asset.
Range option: Limited Options brokers offer you to trade on the range; for instance, the market price on EURUSD is 1.2010. You predict that the market price will be between 1.2020 and 1.2000 till the next 5 minutes, then you can open Range Option.
Expiration Time: When will the option expire? The expiration time is accurate by seconds and milliseconds.
Rate of Profit: The percentage of money that you get as a return after trade expires.
Fundamental Analysis: Analyse and predict market movements according to the financial, political, geopolitical, demographic, and macroeconomic news factors.
Technical analysis: Another way to analyze the market according to mathematics. Technical analyzers check historical price data and volume charts.
When Am I Ready for Real Options Trading?
The answer is straightforward! You are ready when you earn a profit on your demo account.