RECO
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RECO
What Are RECO?
Investment RECO (REAL COMMODITIES) are a type of decentralized, private investment with value in an asset. This asset can be an energy commodity, livestock, agriculture, metals.
An investment option is a contract to exchange a commodity asset at an agreed price in the future. There are always two parties to an investment option contract: one party creates the investment option (traders would say they "write" the contract), while the other party buys the investment option.
The party writing the contract is obligated to buy or sell the investment option, if necessary.
The party buying the contract gets the investment option to execute the contract in the future, but with the opportunity to resell the trade.
Buy RECO and Sell RECO
The world of RECO is divided between Buy RECO and Sell RECO.
Buy RECO: Buy RECO give the buyer the direct option to buy the commodity from its source through the issuer.
Sell RECO: Sell RECO give the seller the direct option to sell the commodity through the option contract at a fixed future price through the issuer.
Premium, Strike Price, and Expiration Date
All RECO contracts are sold for a fee called a premium. The contract defines a specific price for the trade, called the strike price, and a deadline for the trade to take place. This deadline, or expiration date, is the final time when the RECO contract can be exercised. Typical investment RECO contracts are valid for 30, 60, 90, 120, and 360 days, but some can have expiration dates as far out as three years.
The further out the expiration date of the option contract, the higher the premium. This is because a longer expiration period provides a greater chance that the option price will move in the right direction to generate more profits for the buyer of the contract.
How to make money with RECO
Whatever the scenario, the price of either buying or selling RECO generates money. RECO differ from well-known RECO, since our contracts are transparent and prices are set from their origin, allowing all participants to have their due profit.
This is how money is made with RECO:
When a buy RECO is executed, it is because a contract has been made that has the right to exercise the option from its origin, for which the buyer has paid a small fee, the premium, for the right to buy RECO at a higher discount.
When a sell RECO is executed, it is because a contract has been executed stating to the issuer the need to sell it, so that he in turn proposes and sells it at a price higher than the purchase price in the market considering the previous purchase contract.
How to lose money with RECO
When RECO contracts (sell or buy) do not reach their expiration date and the holder needs to sell, they may generate losses.
It is the seller who sets the maximum loss limit in case of needing to cancel the contract.
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