Trading a future contract always means having a huge capital. But trading a futures contract comes along with its own potential benefits.
The major difference between a futures contract and an options contract is the time decay.
While the future contract comes along with a higher investment option, the options contract comes along with the risk of wiping away your complete capital.
In this article, we’ll have a snapshot between the futures contract and the options contract. Moreover, will also try to understand how FinExchnge helps you in trading the futures contracts.
So let us get started.
What is a Futures Contract?
A futures contract is based on the price of the underlying asset. The price of the underlying asset determines whether a future contract will be bought or sold. Depending on the price, a certain future price is forecasted.
If the forecasted price is greater than the current price and with time, the current price of the stock reaches beyond the forecasted price, selling a futures contract will result in a profit.
The Futures contract comes with the benefit of rollover.
You can rollover your contract from one month to another without any particular time decay affecting it.
Understanding the Difference Between a Future and an Options Contract
As a future contract is related to the underlying stock, its movement is not as volatile as that of an options contract.
On the contrary, the time decay effect is neutralized since as time progresses, the value of the contract doesn’t decline.
This really gives a lot of benefits as the volatility is arrested. When it comes to the risk, the futures contract is open to exponential risk.
On the other hand, the only risk that you have in the options contract is the premium that you have paid.
Now that we are having clarity between a futures contract, and an options contract, let us find out how this brokerage platform helps you in trading both of them.
FinExchnge – Understanding How it Helps Traders
The brokerage platform comes with the benefit of leverage. It gives you enough leverage so that even a beginner trader can go ahead with it.
Now comes the next step, as in how they help you to win the market through the technical analysis. The technical analytic tools help you to ace the market situations.
Tools like Market Quotes and Ticker help you to stay updated. You can choose the right script to trade on based on the current moving prices.
In addition to the leverage, if you are someone who’s into the Forex market as well, this platform gives you awesome swap discounts.
So without worry, get started on your trading journey with FinExchnge.
Your Mentor to Successful Trades
Your mentor to successful trades is the brokerage platform that you trade on. It sticks with you like a best friend and gives you the right guidance as required. FinExchnge Turns out to be the perfect mentor if you are starting a trading journey or you have already tasted it.
Giving you the right tools and technicalities,it ensures that you don’t fall behind. Sign-up with them right away to enjoy some of the coolest benefits while you trade across multiple segments.