Forex option trading gives traders the opportunity to make money at a risk he has set for himself and allows traders to realize gains without having to purchase the underlying currency pair. By incorporating leverage, forex options magnify returns and set a firm downside risk level. Alternatively, currency trading options can be held alongside the underlying forex pair to lock in profits or minimize risk. In this case, limiting the upside potential is usually necessary for capping the downside as well. First started in Philadelphia Stock Exchange on December 1982, Forex Option Trading gains popularity worldwide for its access to deep pool of liquidity and improved market prices.
How many types of forex option trading for forex traders to choose from?
First one is Traditional Option
The traditional option gives the buyer the right rather than the obligation to buy from the option seller at a specified time and price. For example, a trader can purchase the option to buy five lots of EUR/USD at 1.5000 for a certain month. If the price of the EUR/USD goes below 1.5000, then the buyer loses only the premium.
Read more:
http://www.ikonfx.com/forexblog/learn-forex-what-is-forex-option-trading-and-types-of-forex-option-trading/
No comments:
Post a Comment