Online trading options is when an investor literally – trades options online. An option is a contract, where a buyer has the right, but not the obligation, to buy or sell an underlying asset at a set price (the strike price) within a specified time frame. When a buyer enters into this contract then he has begun trading in the underlying asset. He may choose to trade online – reaping many benefits will be explained below.

In option trading, a buyer can select between different underlying assets for his online investment. He may trade in currencies (e.g. USD/JPY) known as forex option trading, commodities (e.g. Gold) known as commodity option trading, stocks (e.g. Google shares) known as stock option trading and indices (e.g. FTSE 100) known as index option trading. The anyoption™ platform offers over 50 possible assets to invest in. The buyer must then select his preferred expiry time: the end of the hour, day, week or month.

Purchasing an online investment works like this: a buyer decides whether he thinks that by his selected expiry time, the chosen asset will be above or below the strike price. If he thinks that the asset will settle above the strike price then he purchases a call option. If he thinks that the asset will settle below the strike price then he purchases a put option. (see article ‘option trading’ for more information).  This can all be carried at out at the click of a button by trading online.

A trade is successful depending on whether the contract expires above or below its strike price. Using the anyoption™ platform, a trader receives a 65%-71% payout when the option expires in-the-money, and a 15% payback if the option expires out-of-the-money.

For example, Investor A places a ?100 online investment on the price of Gold, currently sitting at 955.10 with a return rate of 70%. He selects a call option with an end of the day expiry. If at the end of the day, the price of Gold is 955.11 or above, then Investor A receives a payout of ?170. If at the end of the day, the price of Gold is 955.09 or below, then he receives a ?15 payback. This is a typical online binary option trade and its formula is simple to follow for other assets.

Online option trading is a growing preferred method of investment for many investors. There are several reasons supporting this:

1. Option trading is a type of binary option – this means that an option is being trading, rather than the asset itself. So, the payout is determined once the contract has been created. There are only two possible outcomes in binary option trading: or the option expires in-the-money and the owner receives a fixed amount of cash; or the option expires out-of-the-money and the owner receives nothing. Or in the case of trading on the anyoption™ platform, they receive a 15% payback of their initial investment if the option expires out-of-the-money.
2. Options are easier to trade since the buyer only needs an idea of which direction the asset will move, up or down, rather than predicting the magnitude of the change. This makes it easier for the buyer to receive a payout.
3. Option trading is extremely flexible, due to the wide choice of underlying assets and expiry times available.
4. The online trading risks are much lower, since the buyer controls how much he invests and the most he could lose is 85% of his investment amount. Once the investment has been made, regardless of the magnitude of the price change, the investor will not be called upon for more money.
5. Investments are easily carried out online using the anyoption™ platform, so a trader need not use a broker and can trade from most geographical locations