easyMarkets: What is Vanilla Options?

easyMarkets

easyMarkets is a rather unique company among FX brokers around the world. That’s because they offer some very unusual deals. That trade is called a vanilla option. Option trading is highly recommended as it is a service not provided by other brokers.

What is vanilla option?

A vanilla option is an option transaction that allows you to purchase the right to buy or sell in the future. Vanilla options include put options and call options. This is a trading method where users can trade call and put options by paying a premium, and can aim for unlimited profits while limiting losses.

premium

The right to pay to purchase an option.

put option

Refers to the right to purchase in the future. By purchasing, the holder is given the right to sell the trading instrument at a predetermined date and at a predetermined price.

call option

Refers to the right to sell in the future. By purchasing, the holder is given the right to purchase the traded product on a set date and at a predetermined price.

Benefits of vanilla options

Benefits include:

  • User can set the period
  • No swap points
  • no margin
  • Reduce losses and increase profits
  • Can be held for up to 6 months

Target stocks for vanilla options

The stocks that can be traded with vanilla options are as follows: All foreign exchange pairs are eligible. However, the only precious metals are gold and silver.

  • Forex
  • Gold
  • Silver

Difference between vanilla options trading and forex trading

There is a difference between vanilla options trading and forex trading.

transaction fees

The only transaction cost in vanilla options trading is the premium. On the other hand, in the case of foreign exchange trading, there are transaction fees and swap points. In some cases, spreads may also be included.

Payment date

The settlement timing of vanilla option trading is fixed because it is performed on the premise that the expiry date is fixed. On the other hand, in the case of foreign exchange, there is basically no deadline and payments can be made at any time.

risk

In the case of foreign exchange, risk and return exist in equal proportions. However, vanilla options have limited risk and unlimited returns. Vanilla options do not allow you to lose more than the premium.

Can only be traded on its own platform

Vanilla options can be traded using their own platform. You must place your order through the order panel located on your own platform. Please give up as you cannot place orders with MT4 or MT5.

You can open an account for free

EasyMarkets allows you to open an account for free. There is no risk, so if you are interested, please open an account.

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