Forex vs. Options - Everything You Need To Know

Forex Trading

 
Known as FX trading or foreign exchange by many, Forex trading is a financial market where you can buy or sell currencies and make a profit out of the exchange. If you buy the EUR/USD pair and the EUR goes up in value, you can sell it for a profit. While Forex trading sounds simple in theory, it isn't so when done in real-time. Being one of the most volatile markets in the world, Forex is known to have riskier trades than any other domain. You can make profits one minute and see losses the very next - that's how erratic foreign exchange can get!

 
Options Trading 

 
Another incredibly risky domain, options trading essentially allows you to buy or sell options on assets like stocks, futures, etc. If you think that a particular commodity will rise or fall in value, you can make an appropriate move. Though it comes with a lot of risks, all you need is a good few months of experience to start making adept investments. 

 

Forex Trading

 Here are some of the major differences between options and Forex: 

 
1) Round The Clock Markets: 

 
The markets in Forex are 24 hour-long. This means that you have a lot more time to trade than options and other markets allow. Though it is advised that trading too long is detrimental to health, if you can balance your trades, you'll be able to double your profits! One of the major benefits of having round the clock markets is when a big financial event happens; while typical investment markets close, Forex trading remains open and allows you to capitalize on such events. 

 
2) Liquid Markets: 

 
A liquid market is one where you can always find counterparty to your trading deal. And Forex is one of the most liquid markets in the game today. As a Forex trader, there is no particular period of time when you won't have a buyer/seller for your exchange. 

 
3) Swift Trade Execution: 

 
There are no trading delays while trading currencies. The slippage that you will notice in options trading market won't be found while trading Forex! Since the liquidity itself is so high, slippages rarely happen. Forex brokers today employ high-frequency strategies to ensure your trades are executed almost instantaneously. 

 
4) Leverage: 

 
Finally, leverage in Forex trading allows you to massively amp up your trading capital by adding the borrowed sum to your existing Forex capital. With leverage, you'll be able to hold positions of higher value than you otherwise would with your capital alone. 

 
Intrigued by Forex Trading? Reach out to WesternFX today and start learning on our Forex demo account! We provide our trades with the best of currency exchange solutions - from top-notch Forex trading strategies to platforms. Call us today to get started!