Options are derivative contracts that give the holder the right, but not the obligation, to buy or sell an underlying asset at a predetermined price (strike price) on or before a specified expiration date.
No, HF Markets does not offer options trading. However, they provide various securities and instruments to traders on their platform. This includes 51 forex pairs, metals, energies, stock indices, cryptocurrencies, and ETFs.
Trading with these different assets requires different strategies and knowledge of the markets. Professional traders often use derivatives such as options to manage risk while speculating on the market. With the absence of options trading in HF Markets, traders must look for alternative ways to trade with these derivatives.
- Underlying asset: Options are contracts based on an underlying asset, which can be a stock, commodity, index, currency, or futures contract.
- Strike price: The strike price is when the underlying asset can be bought or sold if the option is exercised.
- Expiration date: Options have a specified expiration date, after which the contract becomes invalid.
- Option type: Options can be a call or put option. A call option gives the holder the right to buy the underlying asset, while a put option gives the holder the right to sell the underlying asset.
- Premium: The premium is the price paid by the buyer of the option to the seller (writer) for the right to buy or sell the underlying asset. Various factors determine the dividend, including the underlying asset’s current price, the strike price, the expiration date, and the underlying asset’s volatility.
- Contract size: The contract size is the amount of the underlying asset covered by each option contract. The contract size can vary depending on the underlying asset and the exchange on which the option is traded.
Options are contracts that give buyers the right (but not obligation) to buy or sell an underlying asset at a predetermined price on or before a future date. Their popularity lies in how traders can use them for various strategies like hedging portfolios from market risks and taking advantage of price movements without owning the underlying asset.
The lack of options trading in HF Markets should not be seen as a significant deterrent for investors since other alternatives are available in futures and forward contracts for those requiring such derivatives. Furthermore, experienced traders usually opt for more complex strategies involving multiple instruments and tools, such as CFDs, when managing their portfolio risk exposure.
Although HF Markets does not offer options trading services directly through its platform, it still has plenty of products suitable for all traders looking to gain exposure to financial markets and profit from their investments.
Please read the HF markets review to learn more about HF markets accounts.