If you want to start trading but you don’t know what Call and Put buttons mean then this article is for you.
Online trading is a legitimate way to earn money. That is why many people are becoming interested in online trading. But it is not easy. If you enter the trading world totally unprepared you will lose a lot of money. To prevent that you need to have some basic idea about online trading.
What is IQ Option?
IQ Option is a trading platform where one can trade a wide variety of instruments. Some of these instruments are Forex, Crypto, stocks, commodities, Indices, EFT, etc. To start trading call options on IQ Option you will need to create an account on the platform.
First of all, you have to sign up on the main page of the website and fill in the necessary information. Once you have your account you can start using it. It has a practice account where you can use $10,000 of practice money for free. To access this, you have to enter the trade room, where you will be able to open deals and make new investments.
What is a Call Option?
A Call is an option contract that gives the owner the right, but not the obligation to buy a certain amount of an underlying security at a certain price within a certain time.
Call options give the holder the right to buy 100 shares of a company at a specific price. This is known as the strike price. The shares can be bought up until a specific date, known as the expiration date. The market price of the Call option is called the premium.
To use the rights that the Call option provides, you have to pay for the premium. At the expiration date if the underlying asset is below the strike price then the Call buyer loses the premium paid. This is the maximum loss. If the underlying price is above the strike price the call buyer profits.
What is a Put Option?
A Put option is a contract that gives its holder the right to sell a number of equity shares at the strike price before the option’s expiry.
Depending on the circumstances, there are a lot of ways to close out or complete the option trade. If the option expires profitable, the option will be exercised.
If the option expires unprofitable, nothing happens. The money paid for the option is lost. A Put option increases in value. This means, as the price of the underlying stock decreases, the premium rises. On the other hand, a Put option’s premium declines when the stock price rises. This is why Put options are sometimes used to hedge or protect from downward moves in a long stock position.
What is Call and Put in IQ Option?
If you trade on your mobile app you will see that the Call button is always green and the Put button is always red. You will also see helpful arrows right on the buttons which will give you a hint about the meaning. When you are working with IQ options you will need to make decisions about your investment amount.
To do that you will need to choose the strike price. The strike price is the level which the asset price has to reach. Once you have chosen the strike price, you will need to guess the direction in which the price will develop. If you are a beginner then you should practice this step before on the practice account. You need to at least have some experience to guess correctly. Anyway, this is where you will have to use the Call and Put buttons.
If you think that the price will rise then click the Call button. But if you think that the asset price will fall then click the Put button. Click wisely because whether or not you will lose or win money depends on this.
Call, Put, and their Variations
If you are trading on a computer then instead of Call and Put you will see Higher and Lower. The meaning stays the same. On instruments like CFDs, Forex, stocks, or Crypto you will find Buy and Sell buttons in lieu of Higher or Lower. Now that you know what Call and Put buttons mean you are ready to trade. Call and Put buttons play an integral role in online trading.
Call and Put buttons play important roles in online trading. If you do not properly know what these buttons do then you will not be able to properly online trade and eventually, you will lose money. If you are a beginner you will find this article helpful. Even if you are not a beginner you will find important information here.