What you can actually trade — options, forex, CFDs, stocks, crypto

The five products a beginner is offered, in one table, with the risk each one hides. Some are much harsher than they look on the signup page.

When you open a trading platform you are offered several different products. They look similar on screen — a chart, a buy button, a sell button — but they behave very differently when things go against you. Knowing which one you are using is not optional.

Digital options (also called fixed-return or binary options)

You pick an asset, a direction and a fixed expiry — say, 60 seconds or 5 minutes. If price is on your side when the timer ends, you receive a fixed percentage of your stake, typically somewhere between 60% and 95%. If it is not, you lose the entire stake.

Two consequences follow, and both are usually glossed over:

• The maths is asymmetric. At an 85% payout you win 0.85 for every 1 you risk, but you lose the full 1. Break-even is not a 50% win rate — it is about 54%. At a 75% payout you need roughly 57%. Any honest evaluation of an options strategy starts by working out the break-even win rate; our calculator does it for you.
• Timing risk is added on top of direction risk. Being right about direction but three seconds early is a full loss. Nothing else on this page punishes timing that hard.

Digital options are popular with beginners because the interface is simple and the entry cost is tiny — often $1 per trade. That simplicity is real. The maths behind it is not simple at all, and in several jurisdictions these products are restricted or banned for retail clients for exactly that reason.

Forex

Trading one currency against another — EUR/USD, GBP/JPY, USD/ZAR. Prices move in tiny increments, so platforms offer leverage to make those increments meaningful. Leverage is also what makes forex the fastest way for a beginner to lose an account, which Lesson 5 covers in detail.

Forex is open 24 hours on weekdays, has enormous liquidity, and costs you the spread — the small gap between the buy and sell price — on every trade. Major pairs like EUR/USD have the tightest spreads; exotic pairs involving smaller economies have far wider ones, which is a real cost that beginners consistently underestimate.

CFDs

A contract for difference is an agreement to exchange the difference in an asset's price between opening and closing. You never own the asset. You can go long or short, you can use leverage, and you can trade gold, oil, an index or a share through the same mechanism.

The hidden cost with CFDs is the overnight financing charge, sometimes called swap: hold a leveraged position past the daily cutoff and you pay a fee every night. A position that looks flat for two weeks can quietly bleed real money.

Shares

Buying actual shares in a company is the slowest and, for most people, the least dangerous option on this page. No leverage means no forced closure and no debt. The downside for a would-be trader is that meaningful moves take weeks, and small accounts cannot diversify. Many platforms marketed as "trading apps" do not offer real shares at all — they offer CFDs on shares, which is a different product with different risks. Check which one you are being sold.

Crypto

Crypto trades around the clock and moves far more than currencies or shares. Double-digit daily swings are normal. That volatility is exactly why it is heavily marketed to beginners and exactly why it punishes an oversized position so quickly. Leveraged crypto — perpetual futures and similar — combines the largest moves on this page with the mechanism that magnifies them. It is the single harshest product a beginner can pick.

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