Tag Archives: Option

General Forex

Option Trading Strategies – One Step Forward

If you are new in the options trading and just got finished with familiarizing with the idea, you might probably be thinking about option trading strategies. Even you have all the basic ideas about options trading, you’ll need a good strategy to make this work for you.

Before you start your trade on option, you must figure out a strategy. Simplest strategy is a long call option. Which is just buying a single call option. But it is just one among many other option trading strategies. Some of them are much more complex, incorporating buying and selling many options, both put and call. In general, they can be divided into three types. One being bullish, which believes the market rates will rise. The next is bearish, which believes the market rates will fall. And the last being neutral, believing the market rates may not change.

As it is said earlier, option trading strategies can be complex and incorporate buying of multiple put and call options, which may increase the chance of profit or decrease the amount of maximum risk. They can all end on same days or different days. Have same strike price or different ones. It all depends on the market understanding of the buyer and their future plan.

An example can demonstrate how a good strategy can be helpful in options trading. Say, you’ve bought a call option and a put option both of a stock at a strike price of $100. If the price of the options are $5 each, your total cost of the option is $10. Now, if the price of the stock increases up to $120, you can exercise the call option and your net gain would be $120 – $10 – $100 = $10. But if the price falls below $80 then you can buy the stock directly at $80 and exercise the put option. In that case also, your gain would be $100 – $80 – $10 = $10. So, if the market moves either way, you can gain from this strategy. Only way you will lose if the market doesn’t change, in that case your risk would be limited to only $10.

A very basic of the option trading strategies is to buy options that are greatly under-priced. In this way, the window of profit increases and the maximum risk amount decreases. Another very important key is the knowledge of what happening in the market. It can enable you to find a position in which the market moves to direction you want. It is not as simple as it sounds, it depends on a thousand factors which can go wrong, but it is a requirement to do successful trading.

So, it is a good idea to know more about various option trading strategies and applying a good strategy for option trading business. For this, you can consult various licensed firms and consultants to get good advice.

Market Analysis

Binary Option Affiliate Market is Growing Exponentially

A relatively new form of financial trading instrument, binary options are growing exponentially and gaining substantial popularity in the financial market. Through binary options affiliate trading, traders and affiliates have become able to generate higher returns by placing bets on the stock, commodity, market indices and currency prices without even needing to buy any contract. Here, the binary partners and binary option affiliate traders do not even need to expose themselves into the ocean of financial risks along with resisting dipping into the financial exchanges.

The trading in binary options is a concept of a long time, but it has received general interest and recognition in the recent time only. Earlier, the binary options are regarded as the exotic options and were traded by only a few persons in smaller as well as private financial exchanges only. If you would have been interested to trade in this market prior to 2008, your cost for buying options must have also been including the fees payable to the private binary option affiliate broker just making your access to the market, as there were hardly any system for the independent individuals in the binary options market to take part to trade in the binary option transaction.

As with increasing popularity of the binary options in the Europe in 2008, they got the place in the exchange list of Options Clearing Corporation (OCC) in the United States. Hence, for the first time, these excellent instruments of trading are made accessible to the individuals without even forcing them to go to an expensive broker. Furthermore, the binary options got listed in the American Stock Exchange (AMEX) later than 2008 for being a witness towards the success of the OCC.

Nowadays, the number of individuals trading in the binary options market has increased exponentially. The growth will remain continued in near future as well as more and more traders and affiliates are learning to deal successfully with these instruments in the market. On the other hand, simple binary option trading software are also introduced by the binary options affiliates brokers to enable their affiliates and traders trade successfully in the binary options market. The new wave of trading in the binary options market requires more advanced and efficient traders and hence, the traders are advised to wisely deal on the board. Hence, the binary option software is evolved, as there is offered unparalleled precision as well as amount of control by this instrument in the financial industry i.e. binary options.

Market Analysis

Pension Annuity Vital To Take The Open Market Option

Annuities are a form of insurance, called longevity insurance. A person buying an annuity with their pension savings has a guarantee that their pension will continue to be paid no matter how long they live after their retirement date. For most pensioners/retirees buying an annuity will be a better choice than income drawdown (unsecured pension), and under current rules it becomes compulsory at age 75. There is no obligation to take the annuity offer from the pension fund manager used when saving for the pension, in fact shopping around for the best annuity rate using the open market option will often yield more retirement income.

Many people feel confused by annuities, and simply go with the first deal they are offered, which will be from the company they used when saving for their pension. This is quite unfortunate, as research has shown that annuity rates can vary by up to 40 per cent between providers.

Each retiree must make a number of decisions about what to do with their pension fund on retirement. According to the current legislation, these decisions must be made between the ages of 55 and 75.

Part of the pension pot may be withdrawn immediately as a tax free lump sum. This is normally limited to 25 per cent of the total, although those with very small funds are allowed to withdraw 100 per cent. The remainder of the fund can then either be slowly withdrawn, or an annuity can be purchased.

The first of these options is often called income drawdown, although the latest official name is Unsecured Pension (USP). The problem with USPs (over the longer term) can be seen in the case of a pensioner who chooses to take 5 per cent out of his fund every year. If he then lives for 20 years after retiring, he will have no pension left to live on.

So, although income drawdown/USPs are permitted under the rules, it is always recommended that regular financial advice should be taken. Normally there will be a point at which purchasing a pension annuity becomes the best option, and under current rules annuities must be purchased at age 75.

Most people will receive a pension annuity offer from their pension fund provider when they reach retirement age. The pension annuity is a type of insurance policy, basically it is insurance against living too long and running out of money (longevity insurance). Annuities give a guaranteed income for life, in return for the retiree’s pension savings.

Annuities are provided by life assurance firms, and it is the life firm that bears the risk that the pensioner may live for a long time after retirement. In this case the firm will lose money, as they will have to pay out more money than they received originally, but for them that is balanced by other pension annuity customers who die earlier than the average time.

Market Analysis

Open Market Option – be Secured at Old Age

The market of annuity is always very completive. You need to find a way of getting much money. Through this way, you will increase your pension income. You are required to freely walk and shop for the best that will give most income. This Open Market Option is offered in the United Kingdom is considered the best. The Open Market Option gives the chance to transfer pension funds. This transfer is done from one like Assurance Company to the next. This is always done with prime objective of achieving high annuity rates. Besides whoever wants to do so must first of all exist to exercise the open market option before taking the lump some money from the Life Assurance Company.

Try to understand if there are any new rules produced by the Financial Services Authority. This will help you understand how you make your movements. Then get to evaluate which Life assurance companies offer the best annuity rates. You need to specify the guarantee period. This will specify how long the payments are done. This ensures that your income continues even if you are dead. For example if you purchased the annuity today and die the following day and you stated that they are paid for five years, then your beneficiaries will continue receiving the annuities.

Sometimes it can happen you die before the age of 75. Unfortunately, this happens before you receive the whole amount of your income. What will follow is that your annuities will be paid in full called lump sum. This lump sum is taxable at a rate of 35%. There are annuities that start at lower pay but increases every year. Some just pay well but do not increase. This means that you have all sorts of options to make your life look like you want.

You will be asked some questions once you have identified your Life Assurance Company. This is the Company considered to be giving you the best annuities for your open market option. Some of the questions may include; your age, whether you smoke or not. They would also want to know whether you bare suffering from any serious ailment. At the same time, they must know your medication levels. These will help them calculate your annuities.

It is important to note that this being your last chance to make your life. You need to do a thorough search. This search will give you the best company to deal with. The fact that it is cheap does not mean that it will serve you well. Continue shopping and get the best for your life income. It is advisable to do you trading within the same company. This will save you much time. It is very important to keep the full track of how the payments are done. This will help you calculate and know hoe much you are still expecting. One important thing you can do to make sure you have made the best decision for the open market option; consult wider and wider. This is important because this decision may not be reversible.

Find the best annuity rates from the entire market using your right to the open market option.

Market Analysis

The Best Annuities For Your Profile Using The Open Market Option

When approaching retirement you will be thinking about the options you need to consider for your retirement income and finding the best annuities will be one of them. The open market option was introduced in the UK to allow everyone at retirement the chance to shop around to find the best annuities from the entire market and not just those offered by the pension company you saved with.

Those retiring will be well advised to seek the services of an independent financial adviser (IFA) so that you have access to the entire market, this is also because many of the annuity providers only sell through their products via financial advisers, so you could miss out on the best annuity rates because you as an individual would not be able to get a quote.

Once you have found a financial adviser then you need to let them know your ambitions for retirement so they can choose the best annuities from the many different types on the market. There is a vast range of different annuity products on the market from, guaranteed annuities to income drawdown and understanding each of these different products would take you weeks of research, this is why you should seek the services of an IFA.

An IFA will ask you questions about the income you will need in retirement and also ask about your lifestyle habits and medical conditions present and past. These questions are asked because there is a possibility that you might qualify for enhanced annuities which give much higher annuity rates than standard, of course depending on the severity of lifestyle habits or medical conditions. It is said there are over 5000 different medical conditions that on their own or in combination could qualify for enhanced annuity rates and give your retirement income a huge boost.

Using the open market option you can be sure to find the best annuities and using an IFA will ensure that the entire market can be research for your exact profile. Retirement income may have to last as much as 30 years so it is vital that you get the best possible rates you can.