Iāve mentioned it before but Iād like to suggest that Freetrade reconsider implementing US options trading into the platform. This along with the ability to hold currency in dollars would be great.
The popularity of options trading has grown exponentially in the US since Robinhood introduced it.
While it can be seen as a a highly risky way to trade there are many ways you can protect your investments with options too as well as generating low but consistent returns from covered calls etc.
This isnāt going to happen
Itās a fair question - sounds like no plans to introduce options? Gatsby is raising on SeedInvest.com.
Wouldnāt really be a fan of adding this, very high risk and already covered off by the market to an extent. Not what Freetrade is about. Just open a Trading 212 account.
I originally thought it could be a good idea but having heard of the horror stories surrounding Robinhood i think its a high risk for both the companyās success and its target customers. Instead, it should focus on building trust amongst first time traders and educate them in their financial journey.
Freetrade could eventually introduce options trading but only if they mange to create an effective financial knowledge checking system. Otherwise, they could end up with massive PR crises similar to Robinhood. So for now, i think this is far far down the lists of āto-dosā for the company.
Trading 212 does not do options though. It only offer Contracts for difference. Last i checked, the only credible company offering option trading is Interactive Brokers and they require customers to have an income and at least 10k of savings (or something like that).
Options trading is pure gambling, donāt trust the skewed view on WSB. Freetrade donāt even agree with shorting so this is the wrong place I think, theyāre trying to convince the world stocks can be safe and responsible saving. On the flip side if 212 could offer it they probably would so maybe thereās regulations.
Ps There are euro options on degiro. Or go all in on GGP.
Yes, Robinhood did terrible work with their platform. I hope they are āpayingā for it now. And hope, they will learn. For sake of their customers and they own sake. Let it be a lesson for others.
Having said that, there is nothing wrong with options. When a person does not know how to play with fire, should not play.
Educate, scan for opportunities, plan and manage a trade and risk connected with it.
So I hope I will see options here.
Options trading is not gambling. Gambling it will become when it is mishandled.
When we do not understand a subject we should not engage before we educate ourselves.
Educate, scan for opportunities, execute, manage the trade and risk. Simply, be prepared. (Yes I know, easy to say, not so easy to do. It mostly goes wrong. If those good trades cover bad once and leave little extra for tomorrow, everything is fine.)
Short selling. When I know there is something wrong with a company or economy, why not to profit from it. I would try in February only if Freetrade did offer short sale in any form; put options or short ETF (options better - cheeper).
Robinhood and how to lose money
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I agree and I would love to see options trading available, but Freetrade needs to ensure its systems can sieve out the non-finance individUals. Simply saying āyou should educate yourself before trading optionsā isnāt going to stop amateurs from signing up to options trading and loosing all their money. Strong Checks need to be put in place and thatās no easy task to do.
So, in my opinion, for the time-being the focus should continue to be on expansion and optimisation as opposed to adding new features like options trading.
Out of curiosity, what do you think a strong check would look like? Iāve been wondering if you could have a 20 question timed test or something similarā¦
Disagree, FT is miles better than any other broker by offering free instant orders for all users.
It doesnāt need to compromise on that achievement by adding high risk speculation contracts or bring leverage into the mix.
The one for DeGiro is fairly long, its an extra test for options. But all the questions are like ātrue or false, I can lose more than my initial depositā etc so its not hard to get through if youāre desperate to lose money.
What about just having the option to write covered calls? I think perhaps that suggestion could have a different thread as itās very different to other options trading in general.
I feel like this would be a good Freetrade+ feature that could really make users a solid return on their Ā£10/month
If the recent trend in stock splits continues there could more be more US stocks that investors could be able to write calls on without massive holdings.
I think it might be a bit of way off in terms of liquidity (and I have no idea how practical it is in reality) but fractional covered calls could be a real USP for freetrade for people without 100 shares.
Freetrade is far from the best out all the brokers they need to offer something different to other platforms and do Options. They should just released new 10Ā£ a month feature and there is nothing special
I heard its apparently due to high stamp duty on options in the UK.
Iām curious to know if trading US options inside an ISA would even be allowed.
Hmm thatās a good point, I donāt think you can trade options in an ISA, you could in a SIPP though - which will presumably be part of FT+ once implemented.
Was just about to post an āideaā on options being implemented into freetrade and this popped up.
Assuming there hasnt been any mention of it?
I understand this might not be in the business plan behind freetrade which is focusing on long hold investing, along with the extra work a UI for options etc will bring with it.
Option trading is very limited to platforms within the UK and europe at this moment in time. It would seem the first platform to bring option trading would have a niche in the current market. That is if the demand and interest is there?
Possibly be an additional incentive for being a premium user?