Risk Management Option provides our clients with many advantages, including Risk Management. These tools will help you reduce your losses or help turn a losing trade into a winner. At present we have 4 risk aversion techniques available to you. 1 Protection Rate 2 Buy Me Out 3 Rollover 4 Trade Protection Insurance ( coming soon ) Protection Rate: In binary options trading, there are two possible outcomes if your asset is in-the-money or out-of-the-money at expiry time. Finishing in-the-money is great, and every option trader does so at least some of the time. But, what happens if you finish out-of-the-money - do you lose your entire investment? Not always. Option™ offer protection rates on every trade free of charge. These are special rates that help cut your losses and return a certain percentage of your investment to you should your trade finish out of the money. This effectively reduces the cost of your trade should it finish out-of-the-money. How much can you expect to receive as a protection? The amount varies between by trade and risk of trade. In general, Option™ offer rates anywhere from 5% to 15% of your investment, with most offering 10% protection for your trade. That means you place a trade with $100 you will receive $10 for every trade that is out of the money. Protection rates for each trade are listed with the information on each trade, when you select your trade the platform will also provide you the Protection rate. This is a benefit for Option™ clients and is free of charge. Buy Me Out: Option™ is introducing several new features to our Risk Management Portfolio. One new feature is the “Buy Me Out” option, which allows the traders to sell their option at any point, for a cost. This feature not only adds a dynamic edge to the trading platform, but helps the investor to limit or reduce his loss or risk. Option™ is the first trading platform to offer this to our clients. It is simple and easy to use, when your trade is going against you, simply click on the Buy Me Out button and the system will offer you a price to close your trade at that time, reducing your loss. Roll Over: Rollover is a powerful stop loss strategy that allows you to minimize losses and postpone the expiry of your option. When the market disagrees with you, that is, when it looks as though your prediction is not going to go the right way by the upcoming expiry date, activate Rollover with the click of a button. This gives you another opportunity to close in the money. When your trade is not going your way in the time expected, you can roll your trade over to the next expiry time, by simply clicking on the rollover button. The cost for a rollover is small compared to the profits you realize. Heres how it works: If a trader sees his position is losing, we offer him an option to roll over, which means to postpone the closing time of the option, hoping that in this additional time the tide will turn in his favor. Traders can roll over to any of the future expiries of the asset (with the exception of the latest expiry) by increasing their existing investment by 30% Please note: Only one roll over is allowed per open position, and the feature only works when you are out of the money. In addition, the trader cannot use the feature to close the option, or switch from Put to Call (or vice versa). Rollover is an ideal feature that allows you to turn loss into gains. The benefit of these tools: * Pushes the option expiry time into the future. * Works as a powerful stop loss strategy. * Particularly useful tool for novice traders in limiting losses.
Posted on: Mon, 04 Nov 2013 21:27:30 +0000
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