Spot Premium

Bored with regular options? There’s always the exotic SPOT option: the single payment options trading option.

A SPOT option is a type of binary option, which has earned the nickname “all or nothing” option, since you either get a predetermined amount of money...or nothing.

With SPOT options, you set the rules: pick the payout you want, and what would have to happen in the market for you to get your payout. Set your own bets, basically. The broker will then calculate what they think the SPOT option is worth, and set up an offer with you, the trader.

The amount the broker offers is the spot premium: the upfront money you pay to buy a SPOT option. If the economic event occurs, you get the SPOT option payout. If not, you lose your spot premium, and you’re left out in the cold.

But hey, that’s the risk you’re dealing with when you set up a SPOT option. Riding in the fast lane wouldn’t be fun if it wasn’t a bit risky.