Option trading?

Even robinhood has options.
Options are a great way of making money by selling calls on amazing stocks we already love so if they dip we can buy them at even lower valuations , if they dont then free money!
Like if u want options

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Following these stories if true, false or exaggerated, does not matter, is unhealthy for the serious investor mind.

I am staying away from that.

Why are you playing to the lowest common denominator? People can lose their money if they buy shares in a company that then goes bankrupt. That does not mean we should stop people buying shares.

There is always risk. Without risk there would be no reason to be rewarded and no reason to invest.

Ultimately people are adults and are responsible for their own investments. We shouldn’t be prevented from buying a certain product just because other people are uneducated on their use.

If you don’t want to use options that is your choice. But you have no right to prevent me and others from using them.

And the margin call you get that wipes your holding out. There is a reason 75% of people lose money on CFDs.

Just don’t overleverage, i.e. don’t get greedy. A sensible trader knows not to over-reach and end up in this position.

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Fair enough. That’s also true for options - they are only as risky as you make them

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Hi T212 Team,

Is it possible to add options trading to the platform. I see huge potential in the platform and all it needs is options trading.

Please can we add the capacity to trade pure options (rather than options CFD’s) in the ISA account?

I’m assuming when you say pure options you are meaning call/put options? If so then…

  • 212 have said they currently do not have plans to add options trading
  • CFD trading cannot be done in the ISA account - it is not ISA eligible
  • Options trading, if it was added, is also not ISA eligible
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Agreed, it would be a very good step if basic Vanilla Options were made available on 212, Vanilla as in basic Put and Call Options as lower risk to start.

As a suggestion other more exotic Options could be added at their discretion later perhaps with a stricter criteria based on experience and with disclaimer. 212 will not want any bad publicity as Robinhood understandably, however if they start with basic Vanilla Options they will further differentiate themselves from competition and be taken more seriously and attract much new business from more experienced traders with larger funds as well as new investors, while reducing churn rate.

Robinhood and Etoro are due to IPO and the funds they raise will be used to expand, they were due to expand to UK, but delayed, it is inevitable Robinhood will open in UK with Options, probably this year so 212 introducing Vanilla Options would deter and steal a march on its competitors. Like most industries it’s a fast moving, stand still at your peril imho.

Robinhood were planning to launch share dealing in the UK, they did not confirm they would launch option trading here.

The only reason options is so prominent in the US is because CFDs are banned, if they weren’t then the majority of brokers would offer those instead.

Agree that options would be a fantastic addition but as you’ll see from other posts on the topic, it’s a much much larger undertaking than you make out and one that 212 don’t see sufficient demand for as of yet so isn’t in their plans.

Robinhood were only planning to allow UK investors to access US exchange listed stocks, nothing more once they launched here. that got cancelled as they realised they needed to consolidate their core market instead of trying to expand overseas.

so not only will robinhood not be coming to the UK and Europe anytime soon (certainly not this year), options still wouldn’t be on the table.

however, considering what the basics of options entails, where do you draw the line between “vanilla” and “exotic”?

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I’m not really sure what “exotic” options means - perhaps it’s in reference to advanced strategies?

@ryan9921 There’s no way CFDs would be popular in the US. I’d argue the only reason CFDs are popular here is because options are not widely available.

I mean put it this way. With 100 shares of TSLA I can sell weekly covered calls to produce a stable stream of revenue of around $500. Doing that every week nets me just over $2k a month. With 200 shares of TSLA I can quit my day job. Now this is something people do all the time to produce monthly income - just take a look at the posts on /r/thetagang if you don’t believe me.

Why on earth would you trade that reliable and steady income stream for CFDs - in which the odds are inherently stacked against you because you are betting against the house! This is why 75% of CFD traders lose money and why T212 is closing down successful CFD accounts - just look at the T212 reddit to see scores of people complaining about having their CFD accounts closed down.

@Dao @Craig1 Interactive Brokers is really the place to go for options. Degiro if you want to buy Optionscheine (which behave like options but come in smaller ratios - usually 1:10 or 1:100) and are traded on the FRA exchange.

@TheFeynmanEmulator Options can be used as part of a serious investment strategy. This is why Hedge Funds use them so extensively. People on wsb like to buy short term options, but you only need to buy LEAPs (long term options) to use the leveraging power of options with the time-value safety of regular stock - i.e. calls that are 1 - 2 years out to expiry. I’ve used this approach on Degiro to achieve over 1000% gains with very limited risk. Remember if you are buying calls your max loss is limited to the premium you pay upfront - this is not the case with CFDs.

Here is the max loss and max profit for a long call

longcall

As you can see - your loss is capped and your gains are unlimited. Can you show me the equivalent graph for CFDs?

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Perhaps not, I guess we will never know for sure.

My logic is this, if CFDs were never banned in the US, would a broker choose to invest in a very complicated infrastructure for options, educate clients in the nuances and risks of options trading vs invest in a comparatively simpler infrastructure and educate clients on a comparatively extremely simple product.

The same logic can be used for traders in the US, would the average retail investor prefer to spend hours understanding payoffs/risks of various option strategies, option assignment risk etc. vs the very simply long/short nature of CFDs?

Don’t get me wrong here, I absolutely hate CFDs and it baffles me that successful CFD traders would prefer to carry on trading CFDs rather than trying to move over to options trading, where arguably they would see greater returns. But you surely cannot deny that for a retail investor CFDs are much simpler to understand.

I’ve been trading options for coming up to 3 years now, no browsing of degenerates on reddit needed for me thanks :wink:

I guess I partially agree with this. Although 75% is too kind, its definitely higher on some brokers! From what I’ve read on here recently 212 are closing down accounts where positions are being kept open for weeks, as this isn’t a “target user” for 212. Which you can understand I guess, when you consider 212 operate a matched principal strategy i.e. all exposure is hedged, so 212 only directly profit from spread + swaps, rather than taking their own bet on which way a stock will go and profiting accordingly by leaving exposure unhedged.

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…would a broker choose to invest in a very complicated infrastructure for options, educate clients in the nuances and risks of options trading vs invest in a comparatively simpler infrastructure and educate clients on a comparatively extremely simple product.

Absolutely yes, because remember that institutional investors and hedge funds all use options for various purposes - leverage, hedging. So the infrastructure would exist for them at the very least, then extending it to retail clients would be fairly simple.

The same logic can be used for traders in the US, would the average retail investor prefer to spend hours understanding payoffs/risks of various option strategies, option assignment risk etc. vs the very simply long/short nature of CFDs?

Those of us who want to make money would (and do!) spend those hours understanding options. For example, both you and I have the choice between options and CFDs, and it seems that despite options having a steeper learning curve, we have both chosen to go with them over CFDs. I guess we just like making money!

It is definitely interesting to read all the people saying CFDs are less risky than options, when CFDs have literally been banned because they are so risky. So I don’t think we would ever live in a world where options are illegal but CFDs are allowed. If options are ever made illegal, CFDs will have been made illegal long before.

I’ve been trading options for coming up to 3 years now, no browsing of degenerates on reddit needed for me thanks :wink:

Tbf the people on thetagang are mainly interested in selling options and generating monthly income through CCs and CSPs, so at least they are not YOLO-merchants :smiley:

From what I’ve read on here recently 212 are closing down accounts where positions are being kept open for weeks, as this isn’t a “target user” for 212

Ah fair enough then

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Have you read some of the early Robinhood blogs? It is far from fairly simple. The fact hedge funds or large investment banks use options is pretty irrelevant here, the systems they either build in-house or outsource are not going to be the same systems used by retail brokers. Also consider the education required for support teams and how much more training would need to be provided to ensure support teams can answer complicated options related questions vs the comparatively simple CFD queries.
Personally I cannot see how the costs of running an options trading platform are lower than that for CFDs but happy to be proved wrong if the figures exist somewhere.

Anyway, imo a big reason CFDs are banned in the US is the exchanges are too powerful and lobby to prevent it happening. I’d bet if they were made legal tomorrow then before long a number of brokerages would start to offer them alongside options / equity trading on margin, mainly to appeal to a less sophisticated customer.

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Im really missing options on 212 please let’s add it. Thanks

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Btw you can vote for it here: Most wanted features Survey (Reloaded)

I don’t really think they will add options here. There are too many inexperience retail traders in 212. Imagine them don’t even know how CFDs work touching Options trading? I have to study options in order for me to trade options. CFD is easier to use but easier to lose money did I learn how to use CFD? nope, as long as a I know how leverage works and how stocks goes up and down it’s good. CFD can be really profitable if you know what you are doing. Options trading is way different because you have plenty of ‘‘options’’ (no pun intended) or strategies to pick in order for you to buy a call or put options. Don’t forget buying contracts with expiration if you didn’t meet your target you most likely lose money.

I voted although I’m not sure about timeline, is there any info on timeline for options?