Classic Options Trading: The Fundamentals
What is classic stock options? how start trade? How does it works? Watch intro video about Classic Stock Options:
One of the popular way to trade on iq option showed on the video sample.
Classic Options represent a straightforward tool used for a powerful trading instrument. The video describes the steps to trade Classic Options and unlock their full potential. Considering that you have already watched the video and familiarized yourself with the necessary steps, please have a look at the key highlight points: The first and foremost parameter in any deal with classic options is the strike price. Strike price represents is the projected value that is anticipated to be achieved or surpassed by the asset.
There are 5 strike prices, which can be selected at the right panel
Majority of assets offer up to 5 strike price options. The further the strike option is from the current market value, the higher the risk of the investment is. The key advantage of classic options is that the higher risk in actual fact decrease the option price, while improving the overall profitability. The second parameter determining the profitability is the date of expiry. The expiration date denotes the deadline for the right to sell or buy the asset with its strike price. Generally, the expiration time is at the work week end (i.e. on Fridays at 21:00 GMT). It is possible to buy an option at the current week end or the following week, or for the chosen month's last week.
Selection of the expiration time (3 points available)
The further the expiration date is from the current date, the higher is the likelihood of the asset price to move in the direction that buyer needs. Hence, the higher is the options price. The third parameter is the single options price. The options cost is defined by the market. IQ Option manages to perform scanning throughout 13 various stock exchanges in order to select the best offers for selling and buying prices. Basically, it is acting as a hub where it is possible to get the best deal for each trade.
It is impossible to change the options price, since it is determined by the market. However, it is possible to select the amount of options to be bought.
The market conditions affecting the situation are: demand and supply among traders, price volatility in the past and the remaining time before expiration. If a trader is lacking in terms of experience, it is advised to use classic options with practice account. In case, if you require any additional assistance related to Classic Options, feel free to contact our professional Customer Support Team.