Trading in options has been around for quite some time. Speculation and profiting are part of the trading game. When it comes to options trading, there are different types of options trading. But, primarily, trading again depends on the type of option being traded.
The two main types of options
Essentially there are two main types of options present. They are classified as follows:
- Call options
- Put Options
These options are exercised by investors when they want to buy a stock or option at a particular price. It is generally perceived that investors who are bullish will go in for call options. It is the belief of the investor that particular stock will surpass the strike price before the expiration of the options.
When investors want to sell some stock at a particular price, then Put options is exercised. Again, just as the call options give the right and not an obligation, put options also work in the same way, but for selling purpose. If an investor is bearish in outlook, then put options come into play.
Other types of options
Broadly, on certain parameters, options are divided into different types. They are as follows:
- Weekly Options
- Near month in-the-money options
- The Protective Put
- Index options
- Mini Index Options
- Binary Options
- Stock Options
- Options on Futures
- ES Weekly Options
- E-Mini Options
- IRA Accounts
- ETF Options
Of all these types of options, certain types of options are suitable for day trading.
A recent trend that is catching up is the binary options trading. Take a look into what binary options and trading actual entails.
Binary options and trading
With the booming number of apps and software that are coming up, binary options trading is surely catching up the investors’ attention. The different types of options trading software include Infinity App, 24 option, and stock pair, among others.
Binary options are also called as digital options or Fixed-return Options (FROs). Here, the outcome is pretty straightforward. It is either a yes or no proposition. As the outcome of this type of trading has only two outcomes, it is called as binary options trading. The outcomes are either something or nothing. Some of the assets that can be used for binary options trading are stock indexes, commodities, currencies, stocks. This works very well for day trading as traders open the position in the day and also close it within the same day.