Let's start immediately with a nice definition. In financial jargon, the option is an asymmetric derivative instrument which, in simple terms, translates into a contract with a non-binding clause to buy or sell the security on which the option has been subscribed. The security in question - which may be a share, a pair of currencies, a commodity or another financial product - is called an "underlying instrument" and can be subject to a call or put option (also known as a put and call option).
Clearly, the application of the option takes place in a given time and at a given market price (you can also consult the in-depth study dedicated to covered this type). An asymmetric financial instrument is defined as the holder may decide to sell or buy the underlying only if he believes that he can profit from it; in this way, he reserves the advantage of studying the stock market, understanding its performance and evaluating when to apply the option. As usual, we recommend to study carefully the market with the appropriate tools and perhaps using good and complete texts.
In recent years, the binary options market has experienced an impressive rise. This is because first it gives traders the possibility to face investments with great versatility and operations. In fact, there are strategies that allow you to gain during long market trends and others that allow you to achieve your goals simply by maintaining your position.
It is precisely for this reason that trading in options allows you to increase the levels and size of your assets, as opposed to what is not found with the use of the underlying. Other positive aspects of the options? Almost certainly the fact that they give you the opportunity to:
There are different types of options (global or European), the "simplest" are thosecalls and put options.
Whether you aim upwards or downwards, the aim is to earn, you need to know how to interpret the fluctuations of the market because the options trading does not "focus" on the trend of the stock itself, but on the prediction of its performance on the market, so if the stock loses value and you had bet on its actual loss, the trader makes a profit; if instead the stock loses, but you had made a bullish trade, the trader makes a loss.
The put and call options can have two ways of being: European and American. In the first case, the right can only be exercised when it expires. With regard to the American put option, the person who bought the underlying security may exercise his right against it even before it expires, at any time, without specifying the exercise period to anyone.
You can also buy an underlying asset with a put option, guessing that on the market you can resell it with a call option and - if the intuition is correct - you make a profit both at the time of purchase and sale.
Let us now look in detail at the first option linked to the concept of purchase. As we have said, this is a derivative instrument, i.e. a type of contract or share, for which the purchase price is not self-determining, but is based on the market value of the underlying assets. Let's take a look at the chart below:
In fact, with this type of financial instrument, one speaks of the non-mandatory purchase of the underlying security, but the right to acquire it later by going to pay the premium. The price is referred to as the strike price.
Just to understand better with a practical example, if I buy a certain security at the call option price I will pay an advance of € 1 for a real value of the security itself of € 4. After one month I will be able to have full possession of the property, but paying a higher value, for example € 4.8. The gain occurs in the event that the security itself, in a month's time, has taken on a value higher than the market price I paid, thus allowing me to resell it with a significant profit. Clearly in reality it is not so simple, there are special mathematical and economic tools to carry out the study of markets and opportunities to gain over time.
One of the reference markets for this type of product is the bond market. Put options on bonds allow a maximum limit to be placed in the event of a loss that you, the investor, may risk. Losses generally due to very large fluctuations in interest rates. At the same time, it will be possible to take advantage of the volatility of interest rates to engage in the necessary speculation.
This second type is related to the concept of sale. It is always a derivative instrument linked to the right to sell an underlying security at its strike price, but not to an obligation. If you want more information you can register for the service to always have a private chat service or help by phone to ask for information on account management.
If we want to give an example as in the previous case of the purchase, we take a security with a current value of € 4. A trader can pay the option of € 1 to have the right to resell it after one month at a price of € 3.5. In this way, if the share over the 30 days has lost a lot of value, falling below € 3.5, you can sell it at a higher price than the market.
Again, it is advisable to have financial strategies based on the study of economic models, in order to evaluate the securities held, which it is better to "get rid of", perhaps through the use of online platforms.
When a transaction is carried out - an option is sold or purchased - it is clear that a contract is being "signed" which implies the seller's right to sell the goods and the buyer's obligation to take over the goods. Trading takes place based on a price specified in the contract itself and which is called the "Strike price" (an option can be exercised when it becomes at the money or in the money).
The transaction must therefore be carried out in a similarly fixed time and with a precise maturity since the option itself has a "maturity" that varies with the market trend of the underlying asset. Time is a precious variable: the further a call option expires, the higher the price for selling a put.
The price, therefore, is characterized by two factors: the intrinsic value and the time value.
These are transactions that require practice to be assimilated, and although trading of this type is among the most frequent and "simple" practices on the financial market they are certainly not risk-free and given the volatility of the instruments, the gains are not always insured even though the estimated losses are never very high.
Several rulings, which in recent periods have been issued by the Court of Milan, have made it possible to examine some specific features of put options. These options are offers to which the seller is obliged for a fixed period; the buyer, on the other hand, has the possibility of selling a stock of shares at the strike price in the future.
The first agreement on the immutability of the promisor's motion (art. 1331 c.c.) is linked to the possible admission of the promisor. To deepen the theme, we recommend reading this paper.
The flexibility of the options translates into the need to have a wealth of experience and knowledge no small matter. Clearly it is recommended to start by studying the strategies and techniques of the largest professional operators. The experienced trader can earn money in a variety of situations:
If you want to invest in binary options, as a first move you must understand how what is also called digital option is one of the most immediate and rapid trading strategies and above all the most successful of recent years. Preliminary remark: with shares it is necessary to wait for the occurrence of certain market conditions to open a trade) while with options we will have the opportunity to choose independently their own operating methods.
You can read more about binary options strategies, but let's still summarize the basics: it's an asset value forecast over a specific period.
The asset for those who want to invest with options is basically the component on which to focus:
Options are binary precisely because they allow the investor two choices and thus have a 50% chance of winning or losing.
The binary trading market is now accessible to everyone and many begin to gain through three different types of trades that can be used on major trading platforms.
This binary options trading strategy guarantees a profit margin if the asset price reaches or exceeds a specific predetermined level during the specified time.
It is also possible to invest in the fact that the price of the asset does not exceed or reach the defined level within the established period.
This second strategy for binary option traders is divided into two possibilities.
The Outside boundary makes the trader earn a profit if, when the expected time expires, the price of the asset is outside a predefined range.
Conversely, Inside Boundary allows investors in binary options to receive a return if the price of the asset is within a specified price range over a specified period.
One last strategy for those working with options is High or Low.
Always considering the duration of an asset, the profit of the trader in case of "high" will be dictated by the price of the same asset that exceeds the price at the time of purchase.
If, on the other hand, you point to the "low", the trader gains if the price of the asset is lower than the starting price of the purchase.
With the latter type of High Low Transaction, you can work in times between 60 seconds and 15 minutes, thus quickly verifying the gains of binary options investments.
Many prefer this type of bet, because if you win for every amount you bet you can make a profit of 70-85 percent while the risk of loss of investment is reduced to a maximum of 5% of the total investment capital.
Without going into too much detail, you will certainly have the skills to know that the formula of speculation with more spread and especially with more history behind is trading in shares. Apart from the details you can find in any other guide, we would like to emphasize the development context in order to be able to operate at its best in the online markets.
The birth of stock trading in fact is firmly linked to the first stock exchanges, which have made it possible since the origins of this great financial innovation, the satisfaction of the needs of the most diverse subjects: for this reason you too can take advantage of many knowing how to work with this type of solution. Financial.
When you speculate on a stock exchange, of course, you try to make a profit by buying and selling shares in companies on the stock exchange. By trading pro with shares, you too can become part of the growth of a company made up of shares.
Before buying, the trader who wants to take possession of the shares will have to know at best the development of business of the company in question, while if you are dealing with technical analysis, it will be important to evaluate the data on the graphs related to the short term.
In this type of financial environment, therefore, working with actions is very simple from the start: operationally, you can proceed with the purchase of packages with very simple procedures.
This means understanding right from the start which price level you are willing to buy, as well as the securities suitable for sale, after which you inform your financial broker of the transaction to be carried out and implement if certain conditions occur.
What is fundamental to consider at these levels? Knowing the volume index is crucial for the stock market.
This figure corresponds to the number of trades and transactions that have taken place over a specific period on a particular share. All this helps to better understand how much consideration a security has within the stock market.
Based on this assessment, the brokers you rely on to trade in equities will charge a commission on their trades.
Each broker can consider whether to pay a fee calculated on the percentage of the value traded, or proceed to constant commissions.
In the first case, the stock trading intermediary may want for example a percentage on a minimum investment of 5 euros, while in the second case, regardless of the value of the trading securities, he will ask for 5 euros fixed for each of them.
Absolutely yes: for the novices of online trading, the exchange on the stock market is fundamental to get acquainted with all the tools, and especially with the language and the way of operating the exchange.
As with all trading strategies, also in this case there is the possibility of using specific platforms to speculate in complete tranquility through virtual transactions thanks to which you can learn more about the trend of charts and phenomena related to the trend of prices.
We see some strategies proposed by one of the reference brokers for the Italian market, 24Option. You can open an account and make a deposit by clicking this button and then make a series of moves on the stock markets.
For example, you can invest in Apple, the company founded in 1976 by Steve Jobs, Ronald Wayne and Steve Wozkiak. It's obviously one of the industry's leading companies, and broker systems give you the opportunity to earn money by investing in equities in binary mode, up or down.
Another company on which you can invest online in "Pro" mode with this same system is Google, another leading company in the stock market related to the web: focusing on Google options you will have the opportunity to make interesting investment maneuvers, on a company that is currently on the crest of the wave both for the search engine discourse and for other technological sectors related to "physical" products.
By completely changing genre, you can trade with the shares of Alibaba, a company founded as a B2B sales portal and currently the undisputed leader in online sales. By opening an account, you can immediately start trying to earn money by trying to figure out if, during a time window decided by the system, Baba will close at a price higher or lower than the purchase cost of the option.
It's a very simple system, you just must try maybe through demo trading platforms where you can test for free all services
For several years now, an innovative financial market has been spreading in Italy. This works closely with the internet and allows you to earn money with operations of various kinds: especially for buying and selling (triggering an extreme and varied plethora of different opinions and comments, among experts and not). It is Trading online, also known as TOL. Thanks to this tool, those who have a bank account or who decide to invest in the stock exchange, can buy and sell financial instruments from the comfort of their home, using their own Personal Computer. The regulation took place precisely in 1999 thanks to the new Consob Regulation activating the single text of the financial markets.
Especially those involved in economics and finance must always be kept informed about market trends and the main innovations and changes that take place regularly. The purchase and sale of financial goods and services (equities, bonds, government bonds, etc.) by Internet (a procedure defined as online trading) is also affected by major market changes. It is therefore good to keep up to date and to be familiar with the main economic, accounting and financial instruments such as Fair Value Options.
Parabolic Stop and Reversal (Sar) refers to a trading system based on price and time. In the graphic aspect, it is represented by a succession of points above or below the prices, takes its name from the parabolic form that outlines in the graph. The succession of points of the Sar in the chart if it is built below prices means that it is in bullish trend, on the contrary if it is built above it is in bearish trend.
To fully understand market dynamics, the fair value of financial products and services purchased and sold, it is necessary to have a thorough understanding of stock market developments and key features. Binary options play a dominant role in financial and economic terms and for the optimal management of online trading. Below we will explain in detail the features, providing some strategies to be used to dive into the investment of options.