Investors in financial markets will often come across two widely used ways of trading, which are copy trading and option trading. Both trading formats can be profitable, but they are very different in methodology, risk, and the skills needed. Understanding the differences will help you decide which format best fits your trading objectives.
Copy trading is a type of automated trading where your account will mirror the trades of a seasoned trader. Every buy, sell, and exit order that a professional trader places will be automatically copied into your account in real-time. Copy trading is the best trading option for someone brand new to the market or for busy investors that may not have time to analyse the markets. Advanced trading platforms like Combiz Services Copy Trading Software allow traders to easily link a trading account and select a trader with a strong performance history, and the trading platform will copy their trade book into the investor's account without any work the investor has to do.
Option trading consists of buying or selling contracts (options) that confer the right, but not the obligation, to buy (call option) or sell (put option) an asset at a certain price before a specific date. This is more active and you will need to have a solid understanding of market behaviour and how to create a strategy. Option traders will use more sophisticated analysis to determine when to enter a position and when to get out of a position.
Aspect | Copy Trading | Option Trading |
| Approach | Automated and user friendly | Automated and user friendly |
| Control | Limited – depends on the trader you copy | Full, you can do all the resolution |
| Learning Curve | Good for beginners | Requires considerable understanding |
| Risk Level | Depends on the copied trader | Only at the premium you pay |
| Time required | Minimal | Requires constant monitoring of the market |
Which is Better for You?
If you are new to the market or looking for a source of passive income, copy trading via a platform, such as the Combiz Services Pvt Ltd Copy Trading Software, is the best option for you. A copy trading platform enables you to tap into and benefit from the experience of professional traders with minimal work on your part.
However, if you enjoy a more involved method of trading and would prefer to analyse trends in the market, option trading can provide your own flexibility and correlation over your trades.
Both copy trading and option trading come with their benefits. Your choice will be based on your goals with trading, level of experience, and risk tolerance. If you are a novice trader or looking for a solution to automate the trading process, Combiz Copy Trading Software is a very good way to kick off smart, efficient investments.