What you pay and what you can make
Two numbers come with every sentence, before you pay. The most you can lose is what you pay.
Every sentence comes with two numbers, known before you pay:
- What you pay. The price of the position. You pay it once, up front.
- What you could make. The amount in your sentence.
The trade screen puts them in one line: you risk what you pay to make the amount in your sentence. The review step shows the same two numbers.
Lose only what you pay
The most you can lose is what you paid. Whether the price slips a little or crashes, you lose that and never more. There is nothing to top up and nothing to watch overnight.
The 5% is in the price
The price includes OptionHouse’s margin, 5% of the price. A position on a side many positions already crowd can cost more.
Nothing comes off a win. “Make $3,000” means you make $3,000. A full win pays back what you paid, plus the amount you asked for.
Cheap or costly
A cheap position rarely pays in full. A position that is very likely to pay costs a lot for what it can make. What you pay beside what you could make tells you which one you are looking at.