Jump to content

Options vs ‘funds available’


lamkjo

Recommended Posts

For those ‘in the know’ or with more experience of Options trading out there...

If you buy a Call option (let’s say GBP/USD)  and the price drops vs what you paid for it... so you’re ‘out of the money’. You’re account shows the theoretical amount you are down. 

... in reality you wouldn’t exercise the option as it would be cheaper to buy on the market. However because the account reflects the ‘loss as per the market’ rather than just the commission... the ‘funds available’ on your account are being affected and thus funds that should be for use are being tied up. In reality the real loss is the commission paid for the contract (the call option is the right not obligation to buy the asset... so GBP/USD).

Is this really how it works, what everyone else is also experiencing or am i missing something here?

Thanks.

Link to comment

A bought option (call or put) can only go down to zero (never negative)

If you have 1000 free margin and buy a call for 100 you have 900 free margin left until you sell or the option expire 

If you sell the option (before it expire) at 200 you have 1200 and if you sell for 50 you have 950

When the option expire (you should look it up in info) two things can happen, either it expire worthless at zero or with some kind of value that IG credits the account

 

Best thing to do is using demo to learn  how it works before risking any money

 

 

 

 

Link to comment
50 minutes ago, Kodiak said:

Still waiting for someone with experience to start a thread on optionstrading 😉

Could be interesting and educationally

Remember a oilguy? in ythe past that did some trades but he? stopped for some reason?

And i think Caseynotes did som trades also? 

 

Ah yes, our friend who got himself banned, his long only options strategy looked to be working well until the indices stopped trending and started this long consolidation phase at the start of 2018 and it all went pear shaped.

I toyed with them for a couple of months on demo but for my own trading I was not convinced there was any advantage over SB's. 

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • image.png

  • Posts

    • Elliott Wave Trading Strategies: SP500, SPY, NASDAQ 100, QQQ, RUSSELL 2000, DAX 40, FTSE 100, ASX 200 In this comprehensive Elliott Wave analysis, we dive into the current "Risk On" environment for indices and stocks, focusing on major market movers like Apple and Microsoft. These tech giants are compared to SPX (S&P 500) and NDX (NASDAQ 100) as they drive the market in Primary Wave 3. Detailed counts for the SP500 and NASDAQ reveal we are in Wave iii) of 3 of (5), indicating significant market momentum. Additionally, the DAX, FTSE, and ASX indices are showing promising recoveries from their recent lows. This video explores potential long trade setups across these key markets. Detailed Video Chapters: 00:00 – S&P 500 (SPX) and SPY ETF: Analyzing the primary wave structures and identifying key entry points. 13:40 – NASDAQ 100 (NDX) and QQQ ETF: Deep dive into the tech-heavy index and its leading stocks. 18:07 – Russell 2000 (RUT) and IWM ETF: Small-cap stocks and their wave patterns. 20:20 – DAX 40 (DAX): European market insights and wave analysis. 32:08 – FTSE 100 (UK100): Exploring the UK's leading index and trade opportunities. 34:13 – S&P/ASX 200 (XJO): Australian market analysis and potential setups. 41:33 – Conclusion: Summarizing the key insights and future market expectations. Join Peter Mathers from TradingLounge™ as he provides expert Elliott Wave analysis and trade setups, leveraging his extensive experience to navigate these dynamic markets.  
    • Since the beginning of 2024, memecoin and AI projects have taken the crypto space by storm. Many memecoins have seen incredible adoption, with their market caps surging exponentially over the past few months. Notable examples include WIF, PEPE, and BOME, among others. Traders have shifted their focus to memecoins, drawn by their remarkable profit potential, surpassing even that of traditional BTC and altcoins. While trading memecoins can be highly lucrative, it is crucial to acknowledge the associated risks and conduct thorough research (DYOR). Some memecoins, like CAF and HMTT, have seen significant declines, resulting in substantial losses for traders. Identifying the right memecoin and the optimal time to trade is essential. As a trader always on the lookout for promising tokens, I recently discovered a memecoin with substantial potential: $LAIKA. Unlike others driven purely by social media hype, $LAIKA offers real utility. Its features include a mobile game, Laikaverse, LAIKA wallet, and DeFi (NFT staking), all contributing to its unique value proposition. Since its listing on Bitget a few hours ago, $LAIKA's price trend has been bullish. Several upcoming events provide traders with opportunities to enhance their holdings. I believe $LAIKA has the potential to emulate the success of $****, $WIF, or $DOG, but it's imperative to conduct your own research and avoid fear of missing out (FOMO). Personally, I see $LAIKA as a promising investment and would love to hear the opinions of other memecoin enthusiasts on this token.
    • Iinteresting, I've been watching the memecoin space for a while, and DOGE's success is hard to replicate. But a fast-growing project with a team that has some clout, especially with the Dogecoin Wallet founder on board, piques my interest. Right now, I'm actually busy exploring the treasure trove event on Bitget. The reward pool sounds pretty enticing, and with everything going on in the market, some extra crypto wouldn't hurt haha. I'll have to check out $JUNGLE more closely after I finish up with this event. Launching on Bitget is a good sign, and if they can truly capture that "sincerity and bravery" spirit, it could be something special
×
×
  • Create New...
us