Options on Forex and Dow

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Day option trading with IGmarkets

Use for options (puts/calls) on EURUSD, DOW and FTSE. Buying day options means we don't have to bother with draw-downs since the losses are limited to the option premium but the profits are unlimited and we have the whole day for the trade to go in the money. With a CFD trade the Dow could tank 300 points and then rise 400 back for a profit of 100 for the day, but the position would have been stopped out at 80 or 100. With a call option leave the trade to see if it perhaps won't come back in the money before expiry.

The EURUSD option is usually traded with a strike 100pips away from the the real-time price, this allows huge leverage. If the option rallies past the strike in the money within two to three hours the gain is on the order of around 600%. Compare this to a CFD trade where you would have to risk 100pips (stop- loss at this level) to make a 100pips.

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