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Why trade Options?
An Option is a contract between a buyer and a seller that gives the buyer the right but not the obligation to buy or to sell a particular asset (the underlying asset) at a later day at an agreed price. In return for granting the option, the seller collects a payment (the premium) from the buyer. A call option gives the buyer the right to buy the underlying asset; a put option gives the buyer of the option the right to sell the underlying asset.
Should the buyer chooses to exercise their right, the seller is obliged to sell or buy the asset at the agreed price. The buyer may choose not to exercise the right and let it expire. The underlying asset can be a piece of property, or shares of stock or some other security, such as, among others, a futures contract. For example, buying a call option provides the right to buy a specified quantity of a security at a set agreed amount, known as the 'strike price' at some time on or before expiration, while buying a put option provides the right to sell. Upon the option holder's choice to exercise the option, the party who sold, or wrote the option, must fulfill the terms of the contract.
The theoretical value of an option can be evaluated according to several models. These models, were developed by quantitative analysts, attempt to predict how the value of the option will change in response to changing conditions. Hence, the risks associated with granting, owning, or trading options may be quantified and managed with a greater degree of precision, perhaps, than with some other investments.
Exchange-traded options form an important class of options which have standardized contract features and trade on public exchanges such as the ASX, facilitating trading among independent parties.
Investors choose to invest in options for a number of reasons, including, building a leveraged exposure to an underlying share and protecting (hedging) the value of an existing share portfolio from falling prices.
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Why trade Options with IC Markets?
Trade with a firm built by traders just like you. Our trading platform was developed to save you time and simplify the order entry process and contains innovative charts that make technical analysis a simple.
Trade multiple products from a single online account. That means one username, one password, one log in.
From basic investing concepts to advanced trading strategies, take advantage of our wide array of educational guides, webinars, tutorials and seminars. Our demo trading account even lets you test your trading strategies in a realistic environment without putting any real money on the line.
Use our markets scanners to comb the markets for ideas based on your investing criteria. Customizable charts that help you see the things that are most important to you. Up-to-the-minute news and research resources to keep you on top of the latest market developments. IC Markets gives you more tools to help find your next great trade.
We are committed to finding the right answer quickly, so that investing online doesn't mean investing alone. Take advantage of our customer service and get the help you need - right when you need it.
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