Have You Ever Traded Forex Options?
Have you heard about George Soros; The legendary manager of Quantum Hedge Fund who had made a cool $1 Billion profit from a single bet. In the early 1990s, one day he was sitting in his office discussing currency markets with his associate. Both of them were of the opinion that the British pound was overpriced and Bank of England could not sustain its price for long.
He decided to purchase $10 Billion of puts and calls options by using all their funds assets as collateral. George Soros was willing to gamble everything on a single bet.
He was convinced that the Bank of England cannot sustain the overpriced British pound. In a short time, other speculators also joined action. There was a huge selling pressure on British pound. In a matter of just 24 hours, Bank of England had to take British pound out of the European Monetary System and let it float freely.
British pound plummeted in the currency markets. George Soros had won his bet. He became famous as the man who broke the British pound with his pictures in all the famous newspapers and magazines.
Daily more than $3 trillion are transacted in the currency markets. You as a forex trader can profit from the volatility in the currency markets using a number of methods. Forex options is one of the methods
You as a retail forex trader can trade any one of these contracts: spot, futures and options. Two more contracts are traded in the currency markets primarily for hedging by large institutions like banks, corporations and hedge funds. These are forwards and swap contracts.
What are forex options? Options are derivative instruments that allow you to buy or sell an underlying asset at a price known as exercise price before or on a certain date called strike date. There is no obligation on you to actually buy/sell the currency like that in futures.
Currency is the underlying asset in forex options. You can purchase a forex options on payment of a certain premium. This is the price that you pay for getting the right but not the obligation to buy/sell a certain currency.
When will you profit from purchasing a forex options? If the market price of the currency is above/below your strike price, you can buy/sell that currency by exercising your option of buying/selling the currency at the strike price and make a decent profit.
However, in case, the currency market price is below/above the strike price of the forex options; you need not exercise your right to buy/sell. By not exercising the forex options contract, you only lose the premium.
If you want to try forex options then there is a very good forex options strategy that lets you profit regardless of the direction in which the currency market is moving.
This method is guaranteed to give you profits with an ROI of 30-50%. Try this method. It is risk free. - 23212
He decided to purchase $10 Billion of puts and calls options by using all their funds assets as collateral. George Soros was willing to gamble everything on a single bet.
He was convinced that the Bank of England cannot sustain the overpriced British pound. In a short time, other speculators also joined action. There was a huge selling pressure on British pound. In a matter of just 24 hours, Bank of England had to take British pound out of the European Monetary System and let it float freely.
British pound plummeted in the currency markets. George Soros had won his bet. He became famous as the man who broke the British pound with his pictures in all the famous newspapers and magazines.
Daily more than $3 trillion are transacted in the currency markets. You as a forex trader can profit from the volatility in the currency markets using a number of methods. Forex options is one of the methods
You as a retail forex trader can trade any one of these contracts: spot, futures and options. Two more contracts are traded in the currency markets primarily for hedging by large institutions like banks, corporations and hedge funds. These are forwards and swap contracts.
What are forex options? Options are derivative instruments that allow you to buy or sell an underlying asset at a price known as exercise price before or on a certain date called strike date. There is no obligation on you to actually buy/sell the currency like that in futures.
Currency is the underlying asset in forex options. You can purchase a forex options on payment of a certain premium. This is the price that you pay for getting the right but not the obligation to buy/sell a certain currency.
When will you profit from purchasing a forex options? If the market price of the currency is above/below your strike price, you can buy/sell that currency by exercising your option of buying/selling the currency at the strike price and make a decent profit.
However, in case, the currency market price is below/above the strike price of the forex options; you need not exercise your right to buy/sell. By not exercising the forex options contract, you only lose the premium.
If you want to try forex options then there is a very good forex options strategy that lets you profit regardless of the direction in which the currency market is moving.
This method is guaranteed to give you profits with an ROI of 30-50%. Try this method. It is risk free. - 23212
About the Author:
Mr. Ahmad Hassam has done Masters from Harvard University. He is interested in investing, options and forex trading. Read more about Forex Options Non Direction Trading System. Discover a revolutionary new Forex Robot
posted by X - Men @ 5:37 AM
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