The origin of Options Trading dates back hundreds of years to about 330 BC when a man named Thales secured his right to buy olives before harvesting time. Years later, in 1636 tulips were traded with options in Amsterdam. The array of options contracts to trade has grown over time, covering for example precious metals, stock indices, energy sources such as oil and natural gas, currencies or interest rates.
An option is a contract giving the holder the right but not the obligation, to buy (Call), or sell (Put) the underlying asset at a pre-arranged price on or before a fixed date in the future.
The buyer of a Call Option acquires the right, but not the obligation, to buy the underlying asset at a fixed price. The buyer of a Put Option acquires the right, but not the obligation to sell the underlying asset at a fixed price. Options can also be sold or written. While this opens up a wide range of possibilities for market participants, it does not come without a high degree of risk and therefore requires a high level of product knowledge.
Options are so called derivatives. "Derivatives" markets consist primarily of two types of participants, hedgers and speculators.
The purpose of hedging is to reduce the risk of loss or to lock in profits on any existing position. This is achieved by taking positions in Options (or Futures) markets that are equal in size and opposite to the current cash positions.
Speculating involves trades that involve a certain element of high-risk and is designed to profit from a rise or fall in a particular market.
Via Broker Junction you may enter trades on major exchanges around the globe. Our dealers are experienced in trading on all major US., European and Asian exchanges and have access to a vast array of tradable underlying instruments.
Demo/Simulated Futures Trading
If you are new to the world of futures and options trading, Broker Junction recommends to sign up for a Free - 14 day simulated trading account prior to funding your real trading account with Broker Junction or any other broker.
There are substantial risks involved in trading futures and options, which may or may not be entirely revealed to you depending on your simulated trading experience/performance. To learn more about this subject and the risks involved, please be advised to review one or more of the following guides: