Options

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Many believe that the Forex trading game. This is partly true, but unlike the game of Forex trading is a real opportunity to earn a living. Investments in the currency market do not require deep mathematical knowledge, but in Analytics trader should understand. One of the most important abilities - the ability to interpret the news.

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Our dealing center has over activities in the international currency market and gives the possibility to earn on sale of currency for both experienced and novice traders (Forex traders). Forecasts of leading analysts of the market, and, including trading robots and signals enable traders in their work.

Свежий обзор рынка:
SP500 пробил вниз 50MA, до 2 …
Украина способна прервать Ра …
Президент корректирует дивид …
Аппетит инвесторов к рисковы …
Нефть не растёт, евро снижае …
Basic concepts
Option contract (Option), as the name implies, is compulsory only for one side of the seller, which for the price paid by the buyer award (Premium = Option Price) gives the latter the right for a limited time, to buy (Call Option) or sell (Put Option) instrument (Underlying) at a predetermined fixed price (Strike Price). As a tool may serve shares (Stock Option) or indexes (Index Option), futures (Future Option), exchange (Currency Option), interest rates (Interest Rate Option) or goods (Cash Options.

Organized liquid market exists only for the first three, transactions with currency options are quite common in the interbank market. Options of the last two species can be attributed to the exotic. There are two style options: American and European (American / European Style Options). The buyer of the option may require performance by the seller of its obligations (Exercise Option) any day life, while the European style means execution only on the day of expiry of the contract validity (Expiry Date). To avoid misunderstandings, many options of European style, especially those on which the calculation is made in cash, provide for automatic execution, if that makes sense for the holder (Auto-Exercise of In-the-Money Option).

Price of
By the ratio of the current value of the instrument (Underlying Price) and the fixed price of the option (Strike Price) options are classified as follows (Underlying = 100):Part of the value of the option by the holder can earn in the case of immediate execution, called the true value (Intrinsic Value). If this value is negative or equal to zero, say that the option has no intrinsic value. The difference between the full price of the option and its true value is called Extrinsic Value (imaginary price?).

It can be positive, zero and even (for European style options) negative. Otherwise, this value is called the interim award (Time Premium), because it is determined by the time remaining to expiration dates. The dependence of the time of the award from the remaining term of approximately determined by the function Time_Premium = k*SQRT(Time_Remaining). It is clear that the major part of his imaginary value option loses in the last third or a quarter of a life time.

Myths and reality
The General public options have a poor reputation in part thanks to the efforts of not very honest advisers, partly because of their own sad experience. Since, theoretically, the buyer of an option limits the risk of a clearly defined amount unlimited potential profit, and the seller - on the contrary, assumes unlimited risk for a relatively small prize, the first thing that comes to mind novice player,buy cheap Out-the-Money options in the hope of a strong trend and consequently high profit.

After several unsuccessful such transactions newcomer finds in the bins of the Internet information that 70 (80, 90) percent of the options expire бесприбыльными (expire worthless). More persevering and bold continue to experiment, try to take the opposite side of the market, but if you sell it, you sell options expensive In-the-Money).

ironically, the practice shows that the information about 80 per cent of the non-profit (for the buyer) options greatly exaggerated. If you have money and desire, something deeper study of the theory, pricing models, options equivalents and strategies may finally bring the long-awaited positive result. In the options market, any obvious solution tends to be incorrect.

So, buy cheap options do not make sense, since the model underlying the calculation of the prices of almost guaranteed to provide the seller with the safety of his little prize (otherwise it would be out of business). Buying options to short period before the expiration also not the best solution, because some point, they rapidly lose their value. Sale of options from time to time, but not as a regular business, it also changes the odds are not in favor of the player. The most acceptable for small speculators are correctly selected combinations of short and long positions in options, sometimes in conjunction with the market position of the relevant instrument (Underlying).

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