eToro is now providing you even more ways to invest! We’ve recently acquired Gatsby, an options trading platform that works to make this exciting asset class more accessible to the everyday investor. This amazing app has now been integrated directly into the eToro ecosystem. Upon approval, your eToro stocks & crypto account can now be used to open an options account, where you’ll be free to explore this exciting way to access the markets!
The why behind the buy
eToro has always believed in opening up global markets to all investors by giving everyone access to a variety of investing tools. Gaining exposure to options in the eToro app is just one more step toward completing that mission. Now, investors can access more ways to trade and be better equipped to find market opportunities, through a straightforward, easy-to-understand interface.
Simplicity is one of the most important aspects of the eToro platform. It’s designed to enable investors of all levels to be able to trade options confidently. That means that you can interact with the market in more ways, and under more conditions, while still feeling empowered in your investing choices.
So what are options, anyway?
Options are a derivative asset, which means their worth is derived from something else (in this case, stocks), and they can be traded on a marketplace, like all other assets available on eToro.
Essentially, options are contracts that give the buyer the right to purchase or sell stocks (usually representing 100 shares of the underlying stock per option contract) at a predetermined price. You purchase the contract at a set rate (a fraction of the cost of the shares), and hope the market moves in a particular direction, within a specific timeframe. If you think the stock price will go up by a certain time, you may choose to buy a “call.” If you think the price will go down by a certain time, you can consider buying a “put.” Both of these secure your buying or selling rights at a set price.
Options provide a source of leverage because they allow for a relatively small amount of money to control a larger amount. For example, with a single options contract, you can capitalize on the movement of 100 shares of an underlying stock by only investing a fraction of the cost of buying those 100 shares. However, as a higher-risk-higher-reward asset, note that you might lose the money that you put into the contract in the first place, but you (usually) won’t lose more than that amount*.
The benefits of trading options on eToro
For those new to options trading, eToro simplifies the process for a more curated experience. An easy-to-use design helps you through the process and gives you the choice of how you’d like your options contract.
Ready to get started? Download the eToro app to explore your options.
*There are certain edge cases in which you may be exposed to greater loss than your initial investment. Although these instances are rare, they can occur.
Options involve risk and are not suitable for all investors. Please review Characteristics and Risks of Standardized Options prior to engaging in options trading.