What is Options CFD Trading?
Put simply, in the traditional trading market (not the CFD market) an Option is a contract where the seller gives the right, but not the obligation, to the buyer to buy or sell an underlying instrument such as a stock, commodity, index, forex pair or another asset. This comes with a predetermined price (the strike price) that the underlying instrument needs to reach before an expiry date. In the CFD market, rather than actually owning any options, the buyer/seller has the opportunity to speculate on the price difference of the opening and closing of the Option. When the Option CFD expires, the position is closed at the last available rate.
How do Options CFDs Work?
To understand Options CFDs, we must explore the basic fundamentals. Options CFD features follow traditional Option’s features in how the components are built. These include the following:
The Underlying Instrument: This is the name of the instrument on which the option is based. Options CFDs are based on this and the components are derived from here.
Call and Put: In a very broad sense, the two main types of Options are Calls and Puts. In the CFD market, the buyer of a Call Option speculates that the price will rise. The buyer of a Put Option speculates the price will fall. The Option CFD holder does not have the right to buy or sell, but will either profit or incur a loss from the difference in the opening and closing price.
The Strike Price: The strike price is the price of the underlying instrument on which the contract is set. E.g “Apple | Call 300 | Jul” is a contract based on the price of Apple being above, or below, $300 when it expires in July. In this case, the Strike Price is $300. A buyer of this contract expects the price of Apple shares to be above 外匯 期權 $300 when it expires.
Expiry Date: Every Option contract comes with an expiry date. If the rate of the underlying instrument does not reach the Strike Price before this date, the Option will expire with little, 外匯 期權 or no value. Also, the longer time duration an Option has, the more 外匯 期權 chance the market will move in the holder’s favour: in other words, the closer the contract gets to the expiration date, the less the time 外匯 期權 value of the option. Options CFDs are affected by time value in the same way as the underlying instrument. The Plus500 trading platform will close 外匯 期權 your Options CFD position automatically at the expiry date, if not closed 外匯 期權 earlier by you.
- The current price of the underlying instrument.
- Amount of volatility in the market.
- Expiry date (the longer it is until the expiry date, the more time the market has to hit the strike price).
- Supply and demand in the underlying market for the specific Option.
*Please check the expiry date in the Instrument’s details section, as Plus500’s expiry day may differ from the expiry on the Exchange. The expiry date for Options CFDs on the Plus500 platform is typically set a few days before that of the traditional Options on the underlying market.
Why Should I Trade with Options CFDs?
Trading with Options CFDs generally offers greater exposure than trading other instruments, such as Share CFDs. This means you can open larger positions with less capital. For example, with a leverage of up to 1:5, for every $1,000 you deposit, you can trade up to $5,000 worth of Options CFDs. It is important to remember that while trading with leverage can magnify profits, it can also increase losses.
Traders on the Plus500 CFD platform have the added benefit 外匯 期權 of using risk management tools such as Stop Loss, Limit Stop, Guaranteed Stop etc. to help prevent losses.
Plus500 does not charge commission on any Options CFDs offered on the platform.
Trading Options CFDs may bring many benefits. These include increasing your market exposure as Options CFDs offer 外匯 期權 more leverage than other underlying instruments such as Shares CFDs. There are no commissions on Plus500 Options CFDs and are settled by the difference of the opening and closing price. The Plus500 platform offers risk management tools that can help you mitigate the risk of potential losses. Although trading Options CFDs has its advantages, there are significant risks involved as well, because they are traded with leverage. With all this in mind, if you are looking to speculate or hedge your exposure then CFD Options may be something you can consider.
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STO is the abbreviation of Security Token Offer, which means the issuance 外匯 期權 of security-type certificates. The goal is to issue a public certificate of token under a legal and regulatory framework. In general, ST (Security Token) corresponds to a certain kind of financial assets or interests in the real world, such as company equity, creditor's rights, gold, real estate investment trusts, dividend rights of blockchain systems, etc. STO is an upgraded version of IPO in the blockchain era and can be understood as IPO 2.0.
Reduce transaction costs
Increased transaction speed
Regulatory environment for regulatory STO is rapidly improving globally
After tokenizing the object company's equity, more investors can participate more easily by trading smaller units, thus the financing can be completed in a shorter period of time.
Under the traditional investment method, if an investor wants to invest in real estate market, he/she needs to directly allocate a large sum of money to buy a house or buy a share of REITs (real estate funds). After applying STO, a real estate can be digitally marked on the blockchain, divide into corresponding shares, and distributed and circulated on digital exchanges.
Take famous paintings as an example. A famous painting will become worthless if it is divided into pieces. But many people can't afford the price of a famous painting or don’t have financial ability to keep the painting in good conditions. If these people still want to participate in art investment, STO may be their choice. STO marks the famous paintings as digital assets, and the digital tokens corresponding to the famous paintings can be arbitrarily divided. The tokens can be traded while the physical painting is still well kept in the warehouse at the most 外匯 期權 appropriate temperature and humidity.
It is not easy to transport or keep large amounts of gold. STO can solve the investment problem of gold without transportation and storage.
認識選擇權與期貨之差異 – What is Options & Futures
期貨合約通常大於違約期權合約。例如，大多數期權合約都是100股股票。如果標的股票交易價格為30美元，則100股股票為3,000美元（30 x 100美元）。相比之下，標準黃金合約是100盎司黃金。如果黃金交易價格為每盎司1,300美元，則合約價格為130,000美元。因此，期貨合約的規模可能會帶來更大的風險，因為即使資產的基礎價格出現小幅波動也可能意味著期貨合約上漲或虧損的巨額金額。期權合約默認情況下較小，但可以購買多個合約（與期貨相同）以增加波動金額上的規模。
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