Best Strategies For Options Trading in Australia
Best Strategies for Options Trading in Australia offer traders and investors the opportunity to trade a wide range of assets including shares, indices, commodities, ETFs, and cryptocurrencies. However, like any investment or trading product, there are risks involved and it’s important to make sure that you have a clear strategy before you place your first trade.
The key to success with any options trade is understanding the various types of profit and loss metrics that you can use to measure your potential upside and downside risk. These can include p&l per day and p&l as a percentage of the total account. Using these metrics will help you to find the strategies that are likely to work best for your individual circumstances.
Best Strategies for Options Trading in Australia: Tips for Success
As the name suggests, this type of option allows you to buy a call option on the stock you’re trading in and sell it to someone else at a higher price – and you’ll receive a premium for doing so. This strategy offers you the opportunity to gain market exposure with significantly less capital at risk than owning the underlying share, and it can be very profitable as time decay in the option you bought begins to erode its value.
As the name suggests, this type of option enables you to bet on the future price performance of an index, such as the ASX 200. These are very similar to equity and ETF options, but they’re not exercised in the same way as ordinary shares and you don’t have access to dividends or voting rights as a shareholder.