Participants in financial markets have numerous asset categories to invest or trade in to make a profit. One of these categories is the listed options.
Listed options are just normal options that are publicly traded. This means that, when you buy them, you buy the rights to buy or sell a particular asset without the obligation to exercise the rights within the contract’s stipulated expiration period.
Learning how to trade and profit from listed options is a skill every trader requires.
Here are some benefits accrued from trading listed options.
Sophisticated trading platforms
To properly trade listed options you need advanced trading platforms. Platforms that will provide you both access to the market and timely information to help you make the best trading or investment decision.
Saxo Markets, a leading financial intermediary provides a robust trading platform. At home.saxo, you can access and log into the trading platform to get access to more than 1000 listed options that you can invest in, trade and profit from.
Thousands of listed options
Another benefit of trading listed options, is that you have a variety of contracts that you can trade.
On the Saxo Markets trading platform, you have over 1200 listed options that you can invest in. This gives you flexibility in the financial markets and enable you to invest in a range of assets at minimal cost.
Little capital required
When you are trading listed options as opposed to trading the actual assets for example stocks, you will need less money. Rather than pay the full amount of the stock, you only pay a premium to allow the rights to the stock which will be a small portion of the stock price.
When you finally exercise your rights to the contract you could make a similar profit to the other person who paid full amount to the stock.
Difficult to make a loss when trading listed options
When you hold an option to an underlying asset, it is up to you to exercise it within the stipulated period or not. There are several instances that you may choose to not exercise the option. The major one is when the asset price is against your prediction and you are likely yo make a loss if you exercise the option.
By not exercising the option, your only loss will be the amount of premium paid plus commission charged for the transaction.
You can buy assets at prices lower than the prevailing market price
With options, it is very possible to acquire the underlying asset in the option contract at lower than prevailing market prices.
If the price of the asset rises while your contract is still valid, you can opt to exercise it at the agreed upon price which could be lower than the current market price. You can then sell your asset and make collect your profit or hold the asset for much longer to earn higher profits.
Listed options are highly flexible. You can choose to exercise the option or not depending on the current market conditions.
With the American style listed option, you can exercise the option at any time before its expiration period or not. While in the European style, you will have to wait to the end of the expiration period before you exercise the option. If market conditions go according to your predictions, exercising the option will see you gain immediate profits.
Listed options have leverage which the underlying asset may not have. This allows the investor to hold a larger position with little capital outlay which also enhances the profits or loss that one is likely to make.
To join the financial markets in Singapore, Saxo Markets is your financial intermediary of choice. They have been in the market for 25 years and have build a strong reputation and financial backing. With them you will get access to many asset categories including many listed options to trade and invest in.