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Futures and Options Trading
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Futures and Options trading a type of trading tool. They make derivatives trading. Derivatives are trading instruments which are derived from an underlying security. That security can be index, stock, currency or commodity. So, it can be stock futures trading, currency trading or commodity trading.
The reason for the popularity of Future and Option trading is the margin or cash leverage they offer to traders. They allow the traders to take big trading position by paying minimum required cash which otherwise would require big trading amount. You can take position in Futures trading by paying only 15-20% amount of the total trade value.
As with futures, options also offers cash leverage. You can create big trading position with small amount used in trading. This is called as Option Premium.
In fact, Options offer much higher leverage than futures. Although, risk is limited and profit potential is unlimited, you tend to lose money faster in options trading also.
To know more about this, you would need to learn how to trade options. Trading education is must before you jump into future and option trading.
Here you will learn how to start future and option trading to make money in the stock markets.
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Futures Trading : Do You Really Need It? This Will Help You Decide!
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The Importance of Put Call Ratio for Traders
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Get More Cash Leverage On Your Trading Positions By Option Plus
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