Home / NEWS / Options: Pros and Cons
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

 

Check Also

Forensic Accounting in Trading

Role of Forensic Accounting in Trading

What is ‘Forensic Accounting?’ Forensic accounting described as the integration of accounting, auditing and investigative methods to conduct an investigation into a company’s fiscal reports. Forensic accounting provides a financial analysis suitable for court. Forensic accountants are both a finance expert and a professional investigator who trained to look behind the accounting figures and deal ...