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options pros and cons
options pros and cons

Options: Pros and Cons

Options: Pros and Cons

Pros:

Flexibility

Limited risk

Buying options limits your exposure. The maximum you can lose is the value of the option, the price you paid for it.

Purchasing options as a speculative vehicle offers limited downside — you cannot lose more than the price you paid for the option — and unlimited upside, at least on a call. If you purchase a put, your profit is technically limited to the underlying currency going to zero.

The cost of the option may be less than the margin on the same spot position.

Hedging

Cons:

High costs

Liquidity

You pay for the time value of an option. In spot forex, other than rollover charges (typically small), you do not pay for the time you hold a position.

Complexity

Time decay

 

How to Draw Trend Lines

Support and Resistance Lines

Forex Trend Trading

 

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Global futures and options trading reaches record level

Global futures and options trading reaches record level in 2020

FIA released yearly statistics that show the total number of futures and options traded on exchanges worldwide reached a record level of 46.77 billion contracts in 2020, up 35.6% from 2019.