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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