What is an option?

An option is a contract that gives the buyer the right to buy or sell a specified asset at a certain price before or on a certain date. That is, an option is a contract in which the subject of bargaining is not the asset itself, but the right of its primary sale or purchase. The obligation to fulfill the option lies on its seller which can be either the buyer (put option) or seller (call option) of the underlying asset.

Option expiration is a certain day before which the owner must make a decision on its execution.

Options can be used for:

Hedging

Hedging is similar to insurance. Just as we buy a policy on a car, options can be used to insure an investment against a downturn.

Speculation

These are bets on the movement of securities. The advantage of options is that they allow you to profit not only in a rising market. Thanks to their versatility, you can make money in a falling or even a standing market.

Types of options

Call option gives the option holder the right to purchase an asset at a specific price over a specified period of time.

Put option gives the purchaser of an option the right to sell an asset at a specific price within a specified period of time.

Back

2023-08-01 • Updated

Frequently asked questions

How to open an FBS account?

Click the ‘Open account’ button on our website and proceed to the Personal Area. Before you can start trading, pass a profile verification. Confirm your email and phone number, get your ID verified. This procedure guarantees the safety of your funds and identity. Once you are done with all the checks, go to the preferred trading platform, and start trading.
How to start trading?

If you are 18+ years old, you can join FBS and begin your FX journey. To trade, you need a brokerage account and sufficient knowledge on how assets behave in the financial markets. Start with studying the basics with our free educational materials and creating an FBS account. You may want to test the environment with virtual money with a Demo account. Once you are ready, enter the real market and trade to succeed.
How to withdraw the money you earned with FBS?

The procedure is very straightforward. Go to the Withdrawal page on the website or the Finances section of the FBS Personal Area and access Withdrawal. You can get the earned money via the same payment system that you used for depositing. In case you funded the account via various methods, withdraw your profit via the same methods in the ratio according to the deposited sums.