What are Options?
Options provide traders with more choice in the markets. Due to their unique features, they empower traders with strategies and hedging techniques.
How to benefit from options trading:
Trade with limited risk and never get stopped-out (when buying options)
Trade an increase (or decreased) in volatility with no regard to direction
Insure an open position to lock-in profit and/or limit loss
Build option strategies and discover hundreds of new trading tactics
History of Options
1973 was the year that options were first introduced to the modern world of finance. Chicago had a long history of Futures trading used by an assortment of people from farmers needing to hedge their crops to jewellers wanting to insure gold. Therefore, it was a natural move for Chicago to add options as a hedging product. The Chicago Board of Options Exchange (CBOE) was the very first marketplace for trading listed options.
The introduction of electronic trading in the 1980s marked the start of a dramatic transformation. Europe adopted options e-trading and, after fighting pit-traders in regards to their jobs, the U.S. caught-up. In 1985, the CBOE’s launch of the Retail Automatic Execution System (RAES), to facilitate execution of small customer orders, signalling there was demand from across the board.
Electronic trading of options has become a gigantic marketplace; last year exchange traded options worldwide hit a record high at $486 Trillion. The times of traders having to call their brokers, wait for an order confirmation and have no way to track it, are long gone. Today, any trader, small or large, can access an online platform with real-time option quotes and the ability to build simple-to-complex strategies in a few clicks. With the help of technology like ORE’s, trading options has become easy.
How to Trade Options
The best way to learn is to try! Using ORE's web-platform OPTIONSREASY, you can open a practice account and access educate-on a handy educational tool from inside the platform. Furthermore, you can visit the Options School at educateon.com, where you will find a 12-part course, quizzes and strategy guide. Enjoy!