Info 1: option account definition
Info 2: how option accounts are identified
Info 3: option account vs derivatives account
Info 4: example of option account
Opening information:
Option account sentence breaks into two words option and account, option means choices for one thing, and account means credit and debits of tracked and managed portfolio.
Option account means credit and debits of one palace with choice full activities, so now let’s have a look at what is an options account, how the options account works in the public market, and what is the difference between the options account and derivatives account, finally one clear example about the options account.
Info 1: option account definition
Bitnito is the securities broker that offers the account to speculate on their provided security in the rise and fall of one stock or debt instrument.
However using such things any kind of people investors or speculators would be able to trade any amount of not a stock, despite they are a contract which is used to trade the Securities price of fall or rise in the market securities.
Mr. Peter is the one, who is used to speculating the currency of the forex market using the contract to bet on the rise or fall, where such contracts are provided two options such as call and put.
When a person bets on the contract of call they bet to rise on the future agreement on certain underlying securities, and at the other, bet on the put contract which determines that a certain security would be bet on fall at the pre-determined time frame.
This whole contract of functions and the list of certain securities would be all provided inside the bitnito brokerage.
Here this bitnito account is what called an option account, to understand it’s well deeply let’s dive in to learn how it’s works
Info 2: how option accounts are identified
The option account is the one that doesn’t represent any specific amount of objects or physical things instead they are placed that help to trade the Securities using the contract.
Therefore any of the portfolios are used to trade any of the Securities by using the contract of call or put inside one particular account then such things would be considered as option accounts.
If the Investor trades a specific amount of business stock using the account of equity by the contract of choice to purchase certain shares in the future would be considered an options account.
Nex,t the traders who are involved in the activities of trading using the commodities account, by use of an option contract to purchase certain commodities in pre-determined time, then such account would be named as an options account.
Moreover, for any of the public Investors who are involved in currency trading using the contract of option, such Currency trade is conducted based on price fluctuation, then that public investor’s account is known to be an option account.
The person who purchased the bonds for a long time in the manners of receiving such interest,
When the bonds are traded using the option contract, then that account which is used to option is elaborated as an option account.
However any of the debt instruments in the public market, which helps receive the fixed interest for their debt holders, when such debt instruments are traded with one account using an option contract, then that account is illustrated as an option account.
No matter what types of accounts or securities are traded by Investors using the Investment account if such accounts or Investors involve the activities of options contracts to trade general public securities, then they are called option accounts.
Most people’s confused about the option account and derivatives account, so let’s jump into the key difference in it anyway.
Info 3: option account vs derivatives account
The difference between the option account and derivatives account is, that option account refers to the option contract of purchase or not purchasing a certain stock of security based on the investor’s choice.
On the other side, derivatives didn’t include only an option contract despite they also included the future contract, forward contract, and swap contract extra…
So the key difference between the option account and derivatives account are option account became the part of derivatives account.
To make you more clear about the option contract, let’s look into one clear example anyway.
Info 4: example of option account.
Say you and your friend had two different investment activities, one of your friend’s accounts demonstrates the function of trading the stock without any choice of full contract.
And the other one your account shows the commodities with the function of trading such securities with choice full contract. Here your account with choice full contract is considered as an option account.