What is this OPTION? -
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thread: What is this OPTION?

  1. #11
    Why sell option?

    Im starting out a GBPJPY carry trade and needed a hedge against potential GBPJPY downmove. Brief CHFJPY is not dependable - CHF is half of the value of GBP so, although theere is strong correlation between the GBPJPY and CHFJPY, the pips movement is not the same. (GBPJPY moved a few 1700 pips because jan while chfjpy moved just 500)...

    appears like OPTIONS along with a separate non interest account is a means to go for carry trades.

  2. #12
    Forex Options are European Mode, which means that you can not exercise them BEFORE expiry. . You may just exercise them ON the expiry date. Before that date, you may only sell them in the open market, which will not gain you as much as they'd be worth IF you could exercise them at that same time.

    And BK, You're purchasing the RIGHT, not the OBLIGATION. (oh, also that I did PM answer you, hope you have it...).

    The cost for this particular RIGHT is the PREMIUM. In the event the alternative goes your way, and you exercise at expiry for a profit, your profit is decreased by the superior. In case the market goes against you, and you allow the option expire worthless, your highest possible risk is that the premium, the expense of this option. Many beginners start with choices as they are cheap, and you also get leverage, BUT they are (may be) pretty complied...

  3. #13
    Thansk for those inputs; I know have some basic notion on this and study it out of there if it's well worth it for hedging. .


    @mrkam,

    I didn't receive any PM. .

  4. #14
    Binary Choices are really nice BUT you Must know the market direction before using them.they are Greatly dependent on the trend for them to Become profitable

  5. #15
    Maybe a bit like the box options on oanda. I believed I'd found the grail placing a long thin line on USD/HKD at 6pm GMT to perish 10PM GMT....worked 99/100 then blew the lot.

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