Stock Options versus Forex Options

October 2nd, 2015

Stock Options versus Forex Options

Incredibly, most of the Forex traders think that stock options trading and Forex trading are all the same thing. But these two are totally different from each other. If stock options are deer’s, Forex options are tigers.

If you think that these two are same, chances are high that you will end up hurting yourself by trading wrong things. So it is crucial for a Forex trader to know the differences between these two well before starting to trade.

At first, you need to know what exactly is stock options trading. Stock options trading is the trading of stock options. And what are stock options? Well, stock options are nothing but financial statements which allows you to buy or sell certain shares or bonds in the stock market.

Stock Options versus Forex Options
So, what are the core differences between these two terms? Have a look yourself.

Forex trading and stock options trading differ in underlying instruments. Forex trading is based on currency. It is the method of exchanging currency. On the other hand stock options trading is based on stocks. Here people trade stocks instead of currencies.

Analysis of Forex trading is really complex but stock options trading is very easy. As Forex trading depends on movements of two different currencies, the analysis is very tough. But the stock options trading is based on financial statements which is immovable. So the later one is more easy.

The level of leverage is totally different in these two tradings. Level of leverage is extremely high on Forex trading while level of leverage is low on stock options trading.

The trading hour of these two trading systems differs a lot. While Forex trading takes place 24X7, stock options trading can take place only during business hours and business days.

The stress is very high in Forex trading comparing to that of stock options trading. Because Forex trading never stops. Whether it is a holiday or a Christmas, Forex trading goes on and on. So the level of stress is more on Forex trading.

So, Forex trading and stock options trading is totally different trades. If you mix up these two, the result is not going to be good. So beware what you are trading. For more information and tips about stock options and Forex options: Read post