Exchange options on the Russian stock exchange. Directed options trading

A little over two centuries ago, options already existed, but not centrally. Brokers brought together the interests of sellers and buyers on their own; this happened off-the-list, i.e. trading was carried out on the “over the counter” principle. Prices, terms of circulation, premium size - all these points and other features of options were set individually.

After the crash of 1929, a central clearing mechanism was introduced, the rules of contracts, expiration dates, and strike levels were standardized, and over the last half century there has been a rapid growth in the popularity of options.

Why is it safe to trade options

Exchange trading is inextricably linked with risks, so the emergence of financial instrument, which, with a conscious approach, makes it possible to have a flexible approach to solving this sensitive issue, inevitably arouses the interest of traders. Options trading belongs to this category of instruments; moreover, it is risk insurance, as a feature of options, that serves as a significant criterion for participants in exchange trading. Another characteristic feature Options are considered to make a profit, but what makes trading these derivatives safe is the ability to hedge risks.

An option is a type of exchange transaction, which means the right to buy or sell an underlying asset at a fixed price, and this can be done either before a specified date, or directly on a certain day.

What is the advantage of options trading? Options contracts are attractive to traders based on the following criteria:

• receiving a fixed income;
• investment insurance;
• as a derivative instrument that allows you to make a profit regardless of whether the market is growing, stagnating or falling.

Combined options trading strategies arise from the properties of this financial instrument; they provide an optimal risk-reward ratio, and they also lower the requirements for the quality of forecasts.

Options trading: unlimited income with limited risks

The growth in the number of options exchanges is natural against the backdrop of growing interest among traders in options. The advent of the Internet simplified access and contributed to the development of the process; as one example, on the basis of the Moscow Exchange, for the first time in the Russian Federation, a liquid futures options market was created and began to function.

In the role of the underlying asset, taking into account the rights and obligations of the parties to a trade transaction, the following are available:

1. RTS index;
2. shares of Russian issuers;
3. precious metals (gold, silver);
4. oil;
5. U.S. dollar.

Futures contracts provide insurance opportunities in the futures and spot markets. Therefore, there is every reason to assert that trading options on the MB is conducting exchange operations with limited risks high profitability at low costs.

What other features of Moscow Exchange options, in addition to a convenient risk management tool, is it useful for a trader to know about?

• for targeted transactions, the possibility of using clearing;
• construction and application of various strategies;
• the use of options trading by both large players and traders with small amounts of capital;
• Compared to the stock market, the level of costs in the futures options market is significantly lower.
• the ability to achieve maximum “shoulder effect”.

The Moscow Exchange promotes the development of a popular financial instrument, but does not offer the same type of trading as binary options. A big plus options trading on the Moscow Exchange news is released in Russian, while trading with foreign assets requires reading primary sources that are available in English.

To get high profits, studying the potential of underlying assets can be carried out using technical analysis. The ability to read charts, distinguish indicators, carry out calculations - all this is applicable to trading options on the Moscow Exchange, in addition, limited risks, as an advantage of a financial instrument, act in the direction of increasing traders’ interest in options.

Many day traders who trade futures also trade options - in the same markets or in different ones. Options are similar to futures in that they are often based on the same underlying instruments and have similar contract specifications. But options are traded completely differently. Options are available on , stock indices and individual stocks. They can be traded separately, using various strategies, or together with futures contracts or stocks, using them as a kind of insurance in the trade.

In the options market, trading is carried out using option contracts. The minimum unit of trade is one. Option contracts specify parameters such as the option type, expiration or exercise date, tick size, and tick price. For example, the option contract specification for ZG (gold, 100 troy ounces) as follows:

Symbol (IB/Sierra graphs): ZG (OZG/OZP)

Please note that options contracts have three more input parameters than futures contracts: additionally there is a strike price, an execution style and a delivery method.

The contract specification is made for one contract, so the tick cost shown above is the cost per contract.

Options trading carried out in the derivatives section of the Moscow Exchange, called FORTS - futures and options RTS. Trade turnover amounts to approximately 10%-15% of the total amount of all transactions carried out in this segment (the remaining share falls on trade). Options trading carried out within the framework of a standard exchange session.

On stock exchanges options are quoted by value. The exchange offers for quotation a list of options with a certain set of strikes, which change with a set step.

The strike that is closest to the current spot rate of the underlying asset is called the central strike. For example, the current share price is 10.5 rubles, the option lot is 1000 shares. In this case, options with the following strikes are offered for trading: 9000, 9500, 10000, 10500 (central strike), 11000, 11500, 12000.

The income functions of buyers and sellers look like this:

Looking at the figure, we can conclude that options trading involves an asymmetric position of the counterparties in the transaction. Thus, option buyers have the opportunity to receive unlimited profits, and their losses are limited by the amount of the premium paid. The seller's maximum possible profit is the premium, and the potential loss is infinite. In view of the above, you may get the impression that selling options is not profitable, but this is not the case.

Example. Let the investor predict a slight increase in the stock price. Today the share price is 10 rubles. The investor has the opportunity to buy with a strike price of 10 rubles. and a bonus of 1.5 rubles. and sell with the same strike and premium. Which strategy should an investor choose?

Based on the plotted graph, we can draw the following conclusion: if it is expected small change prices, then it is more profitable to sell options (i.e. in sideways trends). If significant price fluctuations are expected, then options are profitable to buy.

Options trading involves three states of this instrument depending on the ratio of the strike and the spot rate of the underlying asset.

For the buyer of a call option the following is true:

• If the strike is > the current market rate for the underlying asset, then the option is called an option “ without money" (or " for money"), i.e. with a loss;
• When is the strike?< текущего спотового курса, то опцион называется «in money" (or " with money"), i.e. with a win;
• If the strike is equal to the current market price asset option is called " near the money».

For buyers of put options the following will be true:

• Out of money (without money, at a loss) if the strike price is less than the stop price;
• At the money (near the money, at breakeven) when strike = market price;
• In the money (in the money, in the profit zone) , if the strike is higher than the price on the spot market.

Options trading - how an option contract is executed on the Russian derivatives market

Let’s say that on the expiration date an investor sees that the option he previously purchased is not “in the money” and decides to exercise it. To do this, he needs to have funds in the futures account (which must be opened before purchasing the option agreement) equal to the initial margin on the RTS index futures multiplied by the number of futures, and the counterparty to the transaction must have the same account with a similar amount.

When a call option is exercised, the buyer takes a long position in the futures contract, and the seller of the option takes a short position in the same futures contract. The buyer of the call option is credited with a positive amount, and it is debited from the seller, at which point the option trading ends and the exercised options disappear.

When a put option is exercised, the buyer takes a short position on the futures, and the seller takes a long position. As a result of the transaction, the buyer of the put option receives a positive variation margin, which is debited from the seller’s account. From the moment the money is transferred, option positions disappear, and options trading is considered completed.

Options trading is carried out according to the following main strategies: (direct, proportional, inversely proportional, calendar), .

What should be understood by the expression - options trading? Initially, the word “option” came from in English and it means “choice”. Therefore, this term is used in the field of stock trading and trading in options and option contracts.

Since the main feature is the ability to select the available conditions for its execution. In other words, this type of trade is all types foreign exchange transactions with various option contracts, where all the existing conditions and risks are set by the trader himself, knowing that when the option contract is executed, he will receive a certain income.

These points distinguish option trading from regular trading, in which it is almost impossible to initially accurately predict what is to come and, as a consequence, what income or loss the trader will have.

Strategies for using options and their types

The use of options in trading is quite diverse. For example, they can be used as. Let's say you are in a long position with the euro. And here, instead of placing a “stop” order, you can purchase “put” and “strike” option contracts at the level of the calculated “stop” order, and if suddenly the price does not go up, then you will certainly lose your position on the spot, but make a profit on the option.

By combining different options, it is possible to create options that fully meet the requirements of investors.

For example, the “straddle” strategy consists of two options “call” and “put” with an equal strike price and expiring on the same day. Fair for them next condition: if their price rises, the buyer will receive income from the “call” option, and if it decreases, then from the “put” option. This trading strategy may be applicable in the event of an upcoming strong market movement, for example on news.

The above options, as well as them in most cases, are used to hedge risks. That's why they are called "vanilla" which means vanilla. But in the market, speculative or “exotic” options also play a significant role.

Such “exotic” options are quite diverse: there can also be barrier options (reverse knockin, reverse knockout, double no touch, one touch) and the like. Most of them do not have a strike price or denomination, but only the conditions under which the buyer has the opportunity to receive rewards.

For example, this condition: by making a payment of $10,000 today, you can receive $25,000, provided that the GBP/USD rate does not touch the 1.9000 point mark over the next 3 months. Also very common are the so-called “double impatiens”, when the conditions stipulate 2 levels with which the price should not come into contact. Such large options are often protected by various option barriers, which means that the buyer of the option sells the asset on the approaches, preventing the price from touching the barrier.

Also, the timing of option contracts and their location affect the market situation. Sellers of contracts are trying not to give big options expire still “in the money” and, as a result, they try to push the price beyond the “strike” level by the time of its expiration, or touch the option barriers, but buyers are trying their best to prevent them from doing this. As a result, the price rushes to the price levels at the time of their expiration.

Options Trading Strategies

Currently, there are many options trading strategies. We will discuss some of these strategies in this article.

"Interday" or contract for increase

This type of trading contract is concluded when there is a forecast for an increase within 1 business day. Here, the fixed net income ratio is 1.8, which is 80% of the profit when the contract is executed.

An example of a bullish trading contract.
They buy an “interday” contract for $100, with the condition of a further increase in the rate, in the time interval 15.00 - 17.00 hours. If this prediction comes true, then total income will be 80 $.

"Interday" or down contract

This type of contract is concluded when predicting a future change in the exchange rate during the 1st working day for a decrease. In this case, the fixed net income ratio will also be equal to 1.8, which is 80% of the profit when implementing the contract.

​Scalping is a type of trading that involves making very fast trades in a short period of time. The option trader always receives either a small loss or a small profit. The time between the start and end of a trade can typically be as little as 15 seconds to several minutes.

It is generally accepted that scalping is quite unprofitable and ignoble, and perhaps even dangerous for your account. There is some truth in this, but it only applies to getting started with options: at first, everything will not work out very well, and a novice trader may often fail in this matter, but everything comes with experience, so we will teach you how to trade competently on binary options.

How to start trading options?

First of all, it must be said that an options market trader must take into account several factors when working with options:

• To be able to trade competently on trading platforms, you will have to regularly pay attention to the stock exchange;
• It's impossible to make money on options a large sum for one operation, so transactions must number in dozens, which takes a lot of time;
• you need to be extremely careful and constantly monitor all necessary changes in order to get the profit you need;
• you also need to take into account the amount of funds invested, because the funds you receive after the transaction depend on this.

Analyzing the quick trading strategy in detail, you can use a one-minute chart as an example, and an option with an expiration time of five minutes will be used to buy.

First, you need to plot the stochastic oscillator, relative strength index and exponential moving average on the chart. Now, in order to know exactly how to trade binary options win-win, you need to understand each of these concepts.

The stochastic oscillator is a technical analysis indicator that shows the position of the current price relative to the price spread for a selected period of time in the past.

Relative Strength Index is one of the key oscillators used everywhere. Using it, you can track the so-called “speed” of price changes.

And finally, the exponential moving average allows you to level out price changes over time. It can also help you find out the beginning and end of a new trend.

Now it is necessary to consider in detail and step by step the entire process of how to trade options.

It is important to pay due attention to false chart signals so as not to make a mistake. They appear with a certain frequency, so it is important that our indicators coincide when making a forecast.
At first you will have to be more careful. We advise you to check whether the schedule matches all the relevant conditions described in various online guides before proceeding to the next step of the transaction. At first you will have to act very quickly, but also very carefully, otherwise risks and failures cannot be avoided. But all the risks are quite low, so you don’t have to be afraid of significant losses, which over time will certainly turn into tangible profits.

What are the pros and cons of scalping?

Learning how to trade options is quite simple, and over time it will begin to bring tangible income, coupled with the experience gained from trading daily. To get started, you just need to study a few useful articles on the query “how to trade”, and you will already have a fairly clear idea of ​​​​working in the field of fast trading and financial transactions in general.

Moreover, quick options carry much less risk than long-term options, which is very suitable for beginners in this business. Therefore, a beginner can have a much greater guarantee of success than if he immediately decides to plunge into a serious section of trading with long trades, where the possibility of burning out for an inexperienced person is many times higher.

The advantages of quick trades are also that the analysis financial market, in turn, also takes much less time, unlike other types of trading on the stock exchange. This is quite convenient for people who have little time to work with financial trades, but want to try trading options, minimizing costs and without incurring a significant loss.

Now you know how to start trading options, which means you already have a foundation on which to build additional knowledge about stock exchange transactions and feel free to try your hand at financial transactions. Work in this area helps not only to monitor the constantly changing conditions of the financial market, but also to quickly respond to its changes. This knowledge will be useful to you both in quick options and if you decide to move on to more serious transactions in the field of financial trading.

What amount can you start trading with?

In order to understand how to trade options, you will need a minimum deposit. The deposit depends more on the broker than on the trader himself, but in any case, the minimum amount is a fixed figure, depending on the platform. Of course, a small deposit reduces the risk of losses due to a bad trading experience, but it also reduces the profit you receive from the transaction. For example, from a transaction worth $1 you can get only 80 cents, but from a transaction worth $20 the profit amount will be as much as $16. The question of what deposit to consider as the minimum and what price of your risk always remains with the trader, but over time you can trade more confidently on options platforms and forget about the minimum deposit and minimum profit, because over time the risk will become less , and profits and trading skills will only grow steadily.

There are rumors that you can’t win absolutely anything at binary auctions, but as a rule, these rumors are spread by people who, having tried to trade once, did not receive any return or significant results, did not earn a million “with one click” and immediately gave up.

If you trade persistently and confidently, then success will certainly be yours. The main thing is a serious approach to business, which will provide you with the main share of success in all your financial transactions.

If you want to be among those who are well versed in how to trade, then come to the training -

Do options brokers withdraw money?

Those who think that binary options a scam for suckers and brokers do not withdraw the money they earned - I hasten to disappoint - they do. If anyone still doubts, I suggest you look at the screenshot.