Vanilla options serve as a popular trading choice among easyMarkets customers. These options provide an avenue to trade both upward and downward price movements of instruments without actually owning them. The primary attributes of vanilla options are the Call and Put options, the Strike Price, and the Expiry.

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Core Features of Vanilla Options

Call and Put Options:

A Call option is purchased when traders expect an increase in the price of an underlying asset, while a Put option is bought when a decrease is anticipated.

Strike Price:

This is the pre-determined rate at which traders decide to buy (call) or sell (put) an instrument.

Expiry:

This refers to the date when the option concludes.

With vanilla options, traders are given the right, but not the obligation, to buy (Call) or sell (Put) an underlying asset at the ‘Strike’ rate by the ‘Expiry’ date. When initiating a vanilla option trade, traders pay a Premium, which is deducted from their account balance.

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Trading Markets for Vanilla Options

• Currency Pairs: The massive 24/5 forex market allows trading of selected currency pairs as vanilla options.
• Gold: Through vanilla options, traders can engage with the global gold market without possessing the physical metal.
• Silver: Similar to gold, silver can also be traded as a vanilla option. Silver possesses a multitude of industrial applications, further amplifying its appeal.

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Benefits of Trading Vanilla Options with easyMarkets

• User-friendly online platform, tailored for options trading.
• Flexibility in choosing trading timeframes, ranging from 1 day to 6 months.
• No fees for holding overnight positions.
• Margin-free trading.
• Fixed risk with potentially limitless returns.

Trade Vanilla options with easyMarkets

How to Trade Vanilla Options?

1. Account Setup: Create and fund your easyMarkets account.
2. Product Selection: Opt for the desired trading product (forex pairs, gold, or silver).
3. Entry Input: Decide the trading amount.
4. Exit Target Setting: Define the strike price and expiration date.
5. Trading Direction: Decide whether the instrument’s price will rise or fall.
6. Trade Monitoring: Keep a close watch on your open position and decide whether to maintain or close it before the expiration date.

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Basics of Vanilla Options

Call Options:

Provides the right to buy a trading instrument at a future strike price. The premium is paid upfront.

Put Options:

Offers the right to sell a trading instrument at a future strike price. The premium is also paid upfront.

Strike Price:

The pre-determined rate for buying or selling an instrument.

Premium Factors:

Multiple variables, like volatility, strike price, and time to maturity, influence the premium of a vanilla option.

Trading Hours:

Options are available for trading 24/5, with specific breaks for forex, gold, and silver options.

Vanilla options are celebrated for their versatility. They’re a suitable trading method for both novice and seasoned traders. With various maturity levels and instrument types, traders can mold their trading strategies accordingly. Further knowledge enhancement about vanilla options can be sought at the easyMarkets Learn Centre.

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Conclusion

Vanilla options open doors to a realm of opportunities in the trading world. With easyMarkets, traders can engage with these options efficiently, experiencing the full extent of their potential. Whether it’s hedging against market volatility or pursuing aggressive trading strategies, vanilla options stand as a robust tool for modern traders.

Trade Vanilla options with easyMarkets

FAQs about Vanilla Options

What are Vanilla Options?

Vanilla options are a type of trading instrument that allows traders to buy a Call option (if they expect the price of an asset to rise) or a Put option (if they expect the price to fall). They come with a predetermined price called the ‘Strike Price’ and an expiration date called the ‘Expiry’. When buying a vanilla option, the buyer has the right (but not the obligation) to exercise this option. The cost of this right is the premium, which is deducted from the account balance when the option is purchased.

How do Vanilla Options differ from direct asset trading?

With vanilla options, traders can benefit from both upward and downward movements of an asset without the need to own the asset itself. They can set their own strike price and expiration date, and the potential risk is known and fixed over a predefined timeframe. Plus, there are no swap charges for holding an option position for up to six months.

Which markets can I trade using Vanilla Options with easyMarkets?

With easyMarkets, traders can utilize vanilla options to trade selected forex currency pairs, gold, and silver. The forex market is open 24/5, while gold and silver options have specific trading hours.

What are the benefits of trading Vanilla Options with easyMarkets?

Trading vanilla options on easyMarkets offers several benefits, including a straightforward online trading platform, flexible trading timeframes from 1 day to 6 months, no overnight funding charges, trading without margins, and a fixed risk with unlimited potential returns.

How can I start trading Vanilla Options on easyMarkets?

To start trading vanilla options, you’ll need to create and fund an easyMarkets account. Once your account is set up, you can select the product (e.g., forex pairs, gold, silver) you want to trade, input your entry amount, set your exit targets (strike price and expiry date), and decide on your trading direction (whether you predict the asset’s price will go up or down). You can monitor and close your trade anytime before the expiration date.