HFM information and reviews
HFM
96%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
XM information and reviews
XM
86%
Exness information and reviews
Exness
86%

What do you need to know about options CFDs?


Unlike traditional options, which are contractual obligations giving the right to purchase or sell an asset at a future date, the options CFDs we offer are derivative instruments that let you trade on the price fluctuations of a physical option without directly owning it. That means that when you close your option CFD positions, you’ll be gaining or losing the difference between the closing and opening price of the position.

Although options CFDs can exist on a variety of underlying assets, Libertex currently lets you trade options CFDs on the S&P 500 index and Brent Crude Oil. These are available in the platform’s Options section and are listed following the convention Underlying asset|Option type StrikePrice|Expiry.

Example

For example, S&P 500|Call 3450|Dec is a Call option CFD based on the S&P 500 index with a strike price of 3,450 that expires at the end of December.

It’s important to note that, since this is a CFD and not a physical option, it doesn’t mean that if you own it, you’ll be able to Buy the S&P 500 for 3,450 until the end of December. Instead, you’re just trading it as a standalone instrument and making a profit or a loss based on the change in its price.

Options CFDs vs traditional Options

Now that you understand options CFDs, some basic background on traditional options will help you trade more effectively. Traditional options are derivative financial instruments whose value depends on an underlying asset, such as a stock, equity index, or commodity. They allow the owner to buy or sell (depending on the type of contract) the underlying asset. However, unlike futures, they do not oblige the holder to buy or sell, which makes them more flexible.

What determines the price of options CFDs

Without going into excessive details and financial formulas, it is sufficient to say that the following key factors determine the value of options CFDs:

Now that you understand the basics, let’s move on to why you may want to trade options CFDs.

#source


RELATED

Silver Trading Guide: How to Trade Silver and Why

Silver, often referred to as "the other precious metal," offers traders and investors a unique opportunity to engage in commodity trading. In this comprehensive guide, we will explore the world of silver trading...

Cyber Monday and the Stock Markets: Friends or Enemies?

The first Monday coming after Thanksgiving is called Cyber Monday and it is very similar to Black Friday only that the former mainly occurs online. Cyber Monday...

Investing vs trading cryptocurrency: What's right for you?

People often mistake investing and trading for the same thing. However, they are very different and each has its own characteristics when it comes to crypto...

Current trends in the precious metals market

Gold and other precious metals are widely recognized as an investment asset class, that is why we would like to tell our readers about current trends...

Trading Guide to TSLA: NASDAQ - All You Need to Know About Tesla

Tesla is regarded as one of the most visionary and innovative tech companies of our time. Here’s everything you need to know about TSLA, including company history...

Dealing With Volatility: What Is VIX Index?

Volatility is a great factor when it comes to trading and the market. Hence, market indicators were developed to help traders quantify the volatility expectations of the market...

Pros and cons of trading Forex with Bitcoin

Cryptocurrencies are gaining popularity again. It's the perfect opportunity to use them for your trading portfolio, especially the ever-popular Bitcoin. Here's a short...

How to trade stocks

If you are unfamiliar with the stock market, then this trader's guide will assist you in understanding this market and how you can easily trade stocks...

Volume Indicators. On-balance-volume

Volume indicators provide a very different kind of indicator because, instead of relying solely on the price, they take volume into account. Prices tell you in which direction an investment is moving...

NFP trading: understanding the effects of the Nonfarm Payroll

Professional traders often consider economic announcements as a reliable indicator of coming price action, and one of the biggest reports that capture traders' attention is the NFP...

Exploring The Limitations Of Fundamental Analysis: A Comprehensive Perspective

Fundamental analysis is a method used to evaluate securities by examining the underlying factors that influence their intrinsic value. It involves analyzing both qualitative...

Coronavirus COVID-19 pandemic possible scenarios

Epidemiologists at the University of Minnesota continue to do their research on Coronavirus COVID-19. They recently published a report in which they...

Analyzing Cryptocurrencies: Key Notions

Today few professionals can boast of an impeccable trading process with cryptocurrencies - there are many nuances. In our article...

Earnings Season & Its Significance for the Stock Market

Earnings season for the first quarter of 2022 is upon us. Here’s what you need to know and what to expect from the markets during this period. Earnings season refers to the period...

Maximizing Returns with USDT Staking: A Comprehensive Guide

In the dynamic world of cryptocurrency, staking has emerged as a popular way to earn passive income. Among the various digital currencies available for staking...

How to make money on meme stock?

Meme stocks are shares that gained popularity and achieved a cult-like following on social media. As a result, private investors in online communities can create hype and influence the price of individual shares...

How Can You Best Trade Free Float Stocks?

Understanding free float and the main features of their subgroup, low float stocks, is important to many traders. This article provides essential information on this topic to help them...

Why Trade Commodities?

Commodities are traded around the world on different exchanges and are usually traded as futures contracts, which is an agreement to...

Trading Like A CFO - Planning

We already went over the similarities between trading and financial management. Now we are going to get a little deeper into each...

VeChain: Is It on the Verge of Massive Growth?

Asia continues to be at the forefront of blockchain development, and VeChain is one of the brightest crypto projects in the region. There are different opinions...

Vantage information and reviews
Vantage
85%
FP Markets information and reviews
FP Markets
81%
IronFX information and reviews
IronFX
77%
T4Trade information and reviews
T4Trade
76%
Just2Trade information and reviews
Just2Trade
76%
FXNovus information and reviews
FXNovus
75%

© 2006-2025 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.