What Iām talking about is the vote count. Some threads have red ones, indicating that they are trending right now, and that is what Iām aiming will happen with this to bring visibility to what could revolutionise British stockbrokers.
What do you mean āred onesā?
Some vote counts are grey, but others have colour.
Itās alright - Iāll just ask support instead.
I thought they were just all pink unless the thread was closed etc.
Regardless there arenāt any complex algorithms which decide which threads are at the top it is just based on the date of the last comment so adding your vote + a comment to the existing thread does bump it up and gain more attention.
Cant you lose more money than you put in with options through? Thatās distinctly more risky than standard investing. Happy to be corrected if I have misunderstood as I have deliberately stayed away from options so far as I donāt know enough about them yet.
Yeah pretty sure investing in stocks is nowhere near as risky as options
Think someoneās been spending too much time on r/wallstreetbetsā¦
You canāt lose more than you put in when buying options, in that sense they are not riskier than stocks.
When writing options your losses are potentially unlimited, writing options tends to be much more restricted for that reason.
The difference is the price movements, options prices are (generally) way more volatile so relatively small movements in the underlying price can have massive impacts on the option price. For that reason they are generally more risky than shares. Options also lose value over time as they approach the expiration date, so you can lose money even if prices donāt change.
Companies donāt often go bankrupt, but loads of options expire worthless.
No, there are four trades: buy/selling calls/puts (selling usually called āwritingā, I suppose to avoid confusion with a put which is sort of like āsellingā usually means (in terms of the underlying stock) in that itās a bearish position).
You only āput inā money when you buy an option (if you sell the option, i.e. āwriteā it, youāre the other side of that trade, and you ātake outā that money, the premium).
An option is the option to buy/sell (in the case of a call/put respectively) the underlying stock. But itās not an obligation; so your maximum loss occurs when you donāt execute (a choice you make because executing would not make you money) and you lose the premium you paid.
Executing a call has an (potentially unlimited) upside of the difference between the strike price of the option (the price at which it executes) and the current (higher, or you wouldnāt be executing) price of the underlying. Executing a put has an (bounded by the strike price) upside of the difference between the current price of the underlying and the (higher, or you wouldnāt be executing) strike.
Writing options has equal and opposite (in the rawest sense, ignoring spread and market fees etc.) up & downside, so losses are unbounded only if you write calls. But youāre losing money you didnāt even āput inā then (you got paid the premium), so hopefully you knew you were up to something!
Is there such a thing as non margin options?
I think where they get a bad wrap is that we commonly see people losing $50,000 on contracts or going into minus balances?
If you only buy options you canāt lose more than you put in. The risk of losing more than the price of the option comes when you write the option. As the loss is theoretically unlimited you canāt really have a non margin way of doing that I donāt think.
I think rules on margin requirements are much stricter in the EU and UK, so I think itās unlikely a retail investor could rack up that much of a loss.
Recently the margin limits have been capped significantly.
Personally, I donāt think margin trading is right for Freetrade.
I think itās relatively rare to get options on margin as they are already very risky, so almost all options are non-margin.
Wouldāve been great to have this feature during the current chaos
Pretty sure that the recent events will push freetrade further away from offering it though.
Iāve read the premiums on GME options are sky high at the moment though, you need a big move just to break even.
I would love Freetrade to add the options trading to this app. Iāve moved most of my money to another broker just so I can sell puts. Which is a shame. If Freetrade only allow selling puts and selling calls then realistically you never loose your money. The worst case is you end up with stock you didnāt really want which you can just sell or sell calls on. Very safe side of options trading.
That is a VERY rose tinted glasses approach In the real world, options opens Freetrade to have many many many more customers who lose money and probably mean they have to carry a warning like others that do options stating 63% of people lose money on option trading etc.
The reason for the warning is real and enforced for a VERY good reason and probably goes 100% against FTās approach of responsible long term investing. In other words I wouldnāt hold my breath.