OPTIONS TRADE FAVORABLY AT CAPTRADER

Options are suitable for active investors and traders and can be used for purely speculative purposes or as a hedge for a portfolio or an individual security. The operation of options is basically very simple to understand, but complex strategies can be traded, which should only be implemented with appropriate experience.

Options are standardized futures contracts that are traded on an exchange. Warrants are securitized options issued by a bank and are not standardized. While options can be bought as well as sold/written, warrants can only be bought.

Options are traded on options and futures exchanges. The best-known trading venues include EUREX, CME and CBOE.

By selling an option you can generate an income, the so-called option premium. Strategies that aim to sell options and make a profit from the associated time value expiration are called option writer strategies.

There are four basic strategies: The purchase of a call option (long call), the sale of a call option (short call), the purchase of a put option (long put) and the sale of a put option (short put). The four basic strategies can be combined in any way, resulting in a variety of different option strategies. An overview of the best-known option strategies can be found here: Option strategies.

Options are securities traded on futures exchanges that grant the buyer the right to either buy (call option) or sell (put option) a precisely defined underlying (e.g., stocks, indices, futures, foreign exchange, commodities, bonds) at a fixed price within a certain period (American option) or on a certain date (European option).

More information about the Getting started with options trading you will find as a CapTrader customer in the exclusive customer area CapTrader Plus.

There you will get introductory videos to learn the basics of options trading ("what is a writer", "what is a long put", etc.).

Option Strategies: For all those interested, we offer an overview of the various ways to trade options individually or in combination with each other on our Options Strategies page:

About the option strategies

If you have not already applied for options trading in the securities account application, you can do this yourself in the account management (Client Portal) and apply for trading approval.

Click here for the instructions: Request trade release

In the trading authorizations, options are divided into

• Stock options,
• Index options and
• Futures options.

Stock options have shares as their underlying (e.g. an option on Daimler).
Index options are options on stock indices or volatility indices (VIX, etc.).
Futures options always refer to an underlying futures contract, such as options on the Dax future.

Certain financial circumstances and experience are required for the activation of options trading. Enter in the Client Portal how often you have already traded options, what level of knowledge you have and what your financial circumstances are. The system checks the activation on the basis of the information you have provided and issues an approval after 24 hours (trading days).

Exercising an option means that the option holder makes use of his right to buy (call option) or sell(put option) the underlying security. Options are exercised via the option exercise window in the Trader Workstation, which you can access from the "Trade" menu in the Trading Platform.

Further information on exercising options can be found here.