I guess it has more to do with European regulations. Options trading is considered a high risk product not really suitable for most retail traders. In the US they are popular, because derivatives arenât allowed overthere.
Options are derivatives. CFDs are just as risky if not more, than options.
Of course when they introduce options, theyâll need to disclose the risks that are included when trading options. So it has nothing to do with EU regulations stopping T212, more like T212 stopping themselves since CFDs will become obsolete.
Edit: Obsolete for some or most traders who currently trade CFDs here or plan to.
I definitely see 212âs reasons for not implementing:
Large amount of UI work required
Much more complex than CFDs so lot of education and support training required
Doesnât really fit in their current business model
But at the same time it would be a fantastic thing to add as a âproâ feature, maybe do something like degiro where you have to pass tests to unlock options as a financial product? There are countless benefits to more experienced users when using options over CFDs - and many of the complaints about CFDs that more experienced users like to make donât apply to options.
If the ability to trade options is added, this will be a massive game changer for the platform imo and personally I canât wait for it. Fed up of using American platforms with long deposit and withdrawal times.
I think this would boost Trading 212 usage and sales too if you consider that no other UK platform offers options trading (on US stocks). Itâs a win-win for both us users and Trading 212 as a platform.
Seriously people. Are you currently profitable consistently over time with normal shares? If not DO NOT GO NEAR any leveraged instrument. If you canât make money with shares you will just loose more and quicker with any leveraged product.
Explore your reasons for wanting to trade these? Its probably greed, thats not a good reason. And donât base your opinion of tradong cfds etc on the last 6 months. Or youâll be wiped out in the next half decent pullback or bear marketâŚ
So true. most people (there are a few exceptions) âtradingâ here are looking to make 8x gain over 2 weeks. An unfortunate habit carried over from 2017 bitcoin rush.
Only let people open the options account if they can answer some questions about them first
People would happily pay for options access on T212 - would provide long-term revenue for T212. Atm I am paying commission to Interactive Brokers for my options account. Iâd happily pay that commission to T212.
except T212 doesnât want your commission so donât ask for it if you are willing to pay a fee someone else already charges, do your option trading there.
Options look safer but they arenât, you can use safe-ish techniques to limit your risks if you know what you are doing, but itâs possible to lose more money than you have while CFDs are at least protected against negative balances.
currently people can only open CFD accounts after being asked basic questions and it hasnât done them any good, options wonât be any different without a comprehensive competency test. Options are far more complex than the CFDs you are calling âjust gamblingâ which is rather funny.
I personally feel that if someone isnât suited for the market then they shouldnât be allowed into it for their own protection. however the free market principle means that beyond checking for basic competency a platform canât withhold their services if someone wants to use them with all the risks involved. itâs their choice to lose their money where they want to, but not to make claims that suit themselves and disadvantage others.
as T212 gets larger in client base, more people show up asking for more account types. then they complain they canât make money if those accounts arenât present or blame the platform their their loses because they didnât know what they were doing. If someone wants a particular account that a provider doesnât offer, instead of complaining about it, find a provider who does offer it and go there to practice learning how to use it. the reality is most people come to T212 expecting no feeâs and will complain endlessly as soon as that stops being true.
adding new services, is a massive undertaking for a provider due to all the regulations involved with each one. When T212 eventually get around to adding in the options which is being considered, you can expect a fresh flood of forum accounts and topics of people who lost their money trading something they had no idea how it worked, because they saw a âsure-fire way to profit from options without riskâ on reddit, that falsely claimed options were so much safer than CFDs. these arenât traders or investors, just average people looking to try and time the market for a quick profit, upset they got it all wrong. many of the victims are people misled to believe something is safer than it really was, losing life savings and having to work through retirement to make ends meet.
The closest analogy I can think of is that you donât let a child do whatever it wants growing up and expect them to become a respectable, functioning adult in society. you place restrictions, you provide them the chance at education and when you think they are suitable or its no longer viable to keep trying you set them free to their own devices.
Even most games are sold with a tutorial at the beginning that must be completed before sending the player into the main storyline, as gamers would complain about how difficult a game is if they havenât been shown how to move or perform certain actions et cetera. unlike games however, the stock market doesnât have any novice-easy-normal-hard-veteran difficulty settings, you are shoved straight into nightmare/realistic mode and any tutorials are in separate places like optional DLC, not at the beginning of the game where itâs most effective.
chris has a very specific purpose for how he uses options that he has decided fits within his risk tolerances and is more comfortable than trading stocks. that doesnât mean he hasnât also lost a lot of money, nor does it mean what he says is in fact true, he may only be up 30% or even down by the same amount. his experience with options means he can make money from them, this has nothing to do with options being âsaferâ than CFDs, he could just be terrible with CFDs for all we know.