Wednesday, 25 June 2014

Low Capital Needed In Option Trading as Compared To Stock Future

Option trading is a trader friendly kind of trading which allows the trader to find new ways of doing business. It has many strategies and the trader is allowed to choose any one of them or plan a strategy of his own master it and earn profit. Other trading such as stock trading and future trading does not support this feature and have their strict rules which must be followed to do business. Moreover, if recession occurs there is no way by which the trader may safe his money. He may lose all of it or his money may stick in the market.
One of the major benefits of option trading is that you can start trading with even low capital invested. Then use that profit to re-invest and earn even more money. So this trading style supports a small
business to flourish and is giving the new traders to trade without getting loans and selling their personal property to do business. While in future or stock trading sometimes the traders bears so much loss so as to leave the business or sell their personal properties to compensate the effect....
On the other hand, in stock and future trading you have to invest more capital to earn more money otherwise there are such rules according to which you will not be entitled to the profit according to your expectations. Stock and future trading are highly dependent on the stock market if inflation happens you earn money but in case of recession you may lose all your money and left with nothing. This is a major drawback of stock and future trading that they do not support new traders with low financial start. 
So, option trading has an upper hand on stock and future trading in this aspect. And new traders prefer option trading because of this reason. They can invest low capital and make more profit and also can minimize the risk of loss by good planning and broker’s advice while stock and future trading styles are firm and do not have flexibility for them.
Option trading is gaining more repute among traders especially the new ones in helping them a good start in their business and ensuring a better return rate than other trading

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