FX Options / FX OPTIONS / Ask the Community

option trading

mosh2010 — Wed, 01 Dec 2010 07:22:28 GMT

what is
in the money option
out of the money option
at the money option.
what is
buying/selling in the money
buying/selling out of the money
buying /selling at the money.
and please also help me know the leverage different of
in the money option
at the money option
out of money option.
thanks steve we really appreciate

exercise

mosh2010 — Thu, 02 Dec 2010 09:12:17 GMT

hi steve
thanks a lot for your continued help.
please i wanted to learn from you what it exactly mean by saying American option style can be exercised any business day,before expiration.
does it mean any business day ie MONDAY, TUESDAY WEDNESDAY,THURSDAY OR EVEN FRIDAY? provided is an official business day?

Proper Trade

velocityofmoneyinc — Tue, 27 Dec 2011 20:50:51 GMT

I will be purchasing around $200k worth of goods in 2012 from the US. My opinion of the USD/CDN is that the cdn dollar will get weaker making my goods that I purchase from the states more expensive. I wish to offset this risk with an option position on the cdd? To get today's currency pair price on the cdd i would buy 20 option contracts on the December 2012 atm strike? Also are there leaps for this instrument to allow me to hedge 2.5 years away as my buying purchases from the US are going up each year? Thanks for your time?

fyi, i met you at the Financial Forum in 2008 and you gave everyone in your seminar a real $1.00 bill with your logo on it. I still have this bill. Also at the time I was with Jason Ayres and you at the lounge for drinks afterwards. Jason & I both have known each other since 1997 through same venues of careers. Jason obviously went on the direction with optionsource.net in 2006 and has done very well. Glad to see both you and him still working together. My name is Chris Bean and I am from Lindsay, Ontario. My company is www.cartguy.ca

Profitability of long-term options?

jacksmartie — Thu, 02 Jun 2011 15:14:22 GMT

Hello,

I'm new to the world of fx options trading. I have a few years experience trading spot forex, though.

My question is about the profitability of long-term options. That is, options that expire in 6 months or more. I used the options calculator on fxoptions.com and it seems that it's very difficult to profit from long-term options unless there is a large movement in the underlying currency spot prices. Although, I think my calculations are off because I'm only taking into consideration changes in the underlying currency. Since I'm new to options trading, I don't know how to take into consideration things such as volatility.

What I'm trying to do is find out how much of a movement in the underlying currency is needed to be able to profit from buying a call with a 6 month expiration date in, for example, EUU (EUR/USD). Is there some type of formula for this? Or is it too complicated?

Thank you for your help and your time.

strategy

mosh2010 — Wed, 24 Nov 2010 04:40:18 GMT

hello Steve.
there is this question that am seeking to get help from you,about option trading strategy.
suppose am planning to trade straddle or strangle strategy,will i have to pay double premium for either of this strategy.
as in i will am trading straddle, will i have to pay premium for PUT and premium for CALL?
BESIDE THAT ...,do we have something like buying(call) or selling(put) at the money,in the forex option trading.
am very thankful for your unlimited concern and help.

FX options broker in USA

naugraiya — Sun, 25 Sep 2011 13:48:27 GMT

I am looking for FX options online brokers in USA but unable to find one. FXCM, Sottrade, Ameritrade, Fidelity etc do not provide FX options. Can some one help me on this issue.

Thanks
Nag

contest option strategies

coben — Thu, 14 Apr 2011 13:52:56 GMT

Could You please tell me what kind of strategies were used by contest participants in past options challange??? I mean how one can make 30mm from 1mm in 1 month, how it is possible...???

FAQ: Webinar Archives

Admin — Fri, 12 Mar 2010 15:26:59 GMT

Question: Are you webinars archived for later viewing?

Steve's Answer: Yes, our webinars are archived the following day and posted on www.fxoptions.com/events. We have a full list of all of our archives. No registration is required. Are webinars are also converted into video podcasts. Feel free to subscribe at www.fxoptions.com/university.

option strategies

fredyy — Wed, 23 Mar 2011 01:53:36 GMT

hello steve.
please i would like you to help me in understanding well ,the difference between short straddle and long straddle strategy.
secondly i would like you to help me also in understanding the difference between vertical spread strategy and straddle strategy,including the advantage and the disadvantage of each.
i will appreciate
thank you

Covered Calls using ISE FX options

Moka — Sat, 05 Feb 2011 03:27:35 GMT

Is it possible to do Covered Call or Cash covered PUT writing using FX options?
What would be the underlying?
FX futures? which futures? or FX SPOT? since for SPOT there is no central Exchange for FX?

Delta Hedging

qtmspin — Fri, 07 Jan 2011 09:31:00 GMT

I would like to trade theta, time decay only. So I need to be delta neutral.

on YUK

If I sell a
85 call with delta of .61 and
82.5 put with delta of -.52

then my delta is .09

this is the part I do not understand...
to hedge I would need to be short the future or the spot UsdJpy, but how much?

Thanks,
Matt

leverage

mosh2010 — Mon, 20 Dec 2010 01:01:35 GMT

ARE OPTIONS TRADED IN LEVERAGE ?
OR WHAT BRINGS ABOUT SUCH HUGE PROFIT IN CURRENCY OPTION WITHING SUCH A SHORT PERIOD OF TIME ?
SOME AS HUGE AS 200%,400%,EVEN 600%.

leverage

mosh2010 — Sat, 18 Dec 2010 04:47:27 GMT

hello steve .
today i will kindly request you to discuss about leverage in currency option .
I heard a colleague taking about leverages in currency option and even mentioned that leverages of up to 160-to-1 or even 200-to-1 , are offered.
Please I would be very glad if you explain these in details, and even tell us how an investor chooses these while placing a deal.
Thanks very much Steve for your ever willing helping .

closing my put or call

mosh2010 — Thu, 16 Dec 2010 00:33:36 GMT

hello steve
suppose am trading a straddle or strangle strategy,and my option style is American.
is it possible to close out my put contract and leave the call to continue until expiry as well as close the call and leave the put to continue.

pricing

mosh2010 — Tue, 14 Dec 2010 08:38:50 GMT

hello steve.
i was seeking to know how a trader can know the cost of option premium,from strike price offered

closing an option trade

mosh2010 — Tue, 14 Dec 2010 07:20:39 GMT

hello Steve.

as i understand that straddle and strangle trading strategy involves opening both put and call.
is it possible for a trader to close either of them differently on separate occasions....
as in can i close the put option in either strangle or straddle and let the call to continue,and may be close it out later on.

option trading style

mosh2010 — Fri, 03 Dec 2010 01:33:09 GMT

That’s good.
Now what about the American style options?
Beside that what do you mean when you say some one can close out the position any day before expiration on European Style?

Option pricing currency

Alberto — Fri, 26 Nov 2010 10:19:39 GMT

Hi Steve,
I'm new to FX options and I've got a basic question:
in which currency is the option premium expressed?
In particular, I'm based in Europe and I'm looking at EUR/USD options: is the price i can see using your option calculator in EUR or in USD?
And is this a commonly used pricing convention? (i.e. price expressed usually in base currency units)

Thanks in advance for your help

Alberto

strike price

mosh2010 — Thu, 25 Nov 2010 04:38:00 GMT

how does a trader choose the strike price of his option

strike price

mosh2010 — Wed, 24 Nov 2010 01:57:59 GMT

hello steve.
i have co to know that many options firms list a chain of strike for various option whereby the customer chooses for himself the one he is comfortable with...,plus different expiration period.
please do you know of a firm, you can recommend that gives their customer the freedom to choose their own preferred strike price and expiration.

option trading

mosh2010 — Wed, 24 Nov 2010 01:53:24 GMT

Dear steve
what does the following statement mean

Saxo Bank is the first FX Option trading provider to offer trading of FX Options directly on live streaming prices, without dealer intervention, on all Forex Options available.

I S E Options

mosh2010 — Tue, 23 Nov 2010 04:12:58 GMT

hello steve.
what is this ISE FX Options,is it a forex option firm.
can i open up an account with them for trading forex options.
hoping to hear from you

straddle

mosh2010 — Mon, 22 Nov 2010 03:59:59 GMT

Hello. Steve.
Thanks a lot for your commitment and concern, over your help to me.
I have been covering a lot under your help in my forex option interest.
Under your help, I have come to know what a strangle is and what a straddle is, plus many more.
Now, my humble question is if……. it’s possible to choose the spot price as a striking price of a currency option, using the straddle strategy.
If it’s possible, is this the one called buying at the money.

option platform

mosh2010 — Fri, 12 Nov 2010 01:40:43 GMT

hi steve
when i was going through the demo of my option am seeing a provision indicated as exercise method,when i highlight there am given 2 options of exercise method either cash or spot.
please what does this mean.

about your paltform

mosh2010 — Wed, 10 Nov 2010 01:05:23 GMT

hello steve ..,thanks alot for your continued help .
however i was asking on how i can access your option demo account,as i am planning to use to to familiarize myself with it shortly before opening an account with your firm.

option type

mosh2010 — Sat, 06 Nov 2010 04:28:16 GMT

Hello steve.
As I am going through my demo platform of forex option am coming across the following things like
Exercise method < >spot or cash.
Please what does it mean when you choose one of them and what are thy meant for?
Beside that there is also this
Market rate and the Greeks, ie Theta, Gamma, Vega, Delta.
Am having a problem in comprehending my understanding on what they mean and how they differ.
How really important are they, as far as placing my order and success of my deal is concerned, are they so important that they cannot be ignored.

Trading accuracy in performance summary

yoshi54 — Wed, 27 Oct 2010 11:12:08 GMT

I was looking at the performance for fx options over the last few years, and I was wondering if it would be possible to get a list of all the trades, and their outcomes. The information on the performance summary is quite limited, and I was looking for much more information on all past trades and performance. Where can that be found?

trading companies

fredyy — Tue, 26 Oct 2010 03:44:13 GMT

hello steve.
thanks a lot for your help that you have been according to me all the time.
however i would like you to help me know at least some of the best forex trading companies that are good and you may advice about.
particularly those one that can offer a demo account first for forex options.

option trading style

fredyy — Sat, 23 Oct 2010 06:20:14 GMT

hi steve.
am looking for a help concerning this option trading strategy called strangle.
now that strangle involve buying and selling of the same instrument ie call and put but at a different strike price with the same maturity.....,is it a must that the premiums of both the put and the call be of the same value or can have different premium value, ie, one can be let say 1000$ premium put, and a call have premium value of 2000$

option platform

fredyy — Sat, 23 Oct 2010 05:58:58 GMT

hello steve.
as i told you am still familiarizing myself with this forex option trading as i am still new to it and just getting in.
so am kindly requesting if there is somewhere i can access a trading platform of FX option and may be where the option deals are ordered.

profit

fredyy — Tue, 19 Oct 2010 03:37:33 GMT

how does an option investor collects his profit when he close out his position.
i would also want to know the best firms that i can use to trade options.

option profit and expiring

fredyy — Mon, 18 Oct 2010 09:45:31 GMT

please further more how does an investor close out his position

option profit and expiring

fredyy — Mon, 18 Oct 2010 09:44:06 GMT

hello steve.
can an otion investor close out his position before expiration,and what do we call such an option.
ho does an option investor collectes his profit when he close out his position.

Volume/Open Interets

romeo7479 — Tue, 12 Oct 2010 22:48:02 GMT

Hi Steve, i like to idea of FXoptions but when i try it on thinkor swim i don't see any volume/OI. Without volume it hard to sell of the option that i have bought. If i buy 10 contract and only have 5open interest i could sell or close my trade. What the best way to trade FXoptions than??

FAQ: Debit spreads or credit spreads, which is better?

Admin — Wed, 28 Apr 2010 11:27:22 GMT

Question: Debit spreads or credit spreads, which is better?

Steve's Response: According to options pricing models, there should not be any preference to credit spreads or debit spreads. Many traders tend to like credit spreads since they are receiving money, but, in theory, they are paid slightly less due to the cost of money. Traders need to be aware of the risk/reward relationships between debit call spreads and credit put spreads and credit call spreads and debit put spreads. These relationships should be about equal, considering the cost of money (with identical strike prices). Traders need to be comfortable with whichever strategy they select. Personal preference might play a role in deciding if debit or credit spreads make more sense for you.

Skews of USD/CHF, ISE symbol SFC 8/23/10 and USD/JPY, ISE symbol YUK

Steve Meizinger — Mon, 23 Aug 2010 16:53:35 GMT

The USD/CHF (ISE symbol SFC) and the USD/JPY (ISE symbol YUK) are both exhibiting “smile-like” characteristics. The options smile has neither a volatility bias to the downside or upside. Longer dated options, the December term, are much more symeterical than any other month.

Volatility

MHS — Mon, 19 Jul 2010 02:05:32 GMT

Hi Steve,

I am new to options trading, prior to options I have been trading the foreign exchange market exclusively and in particular the AUD/USD spot rate. I consider myself to be a chartist and have been quite successful in the past. However, In June 2010 I suffered a huge blow to my confidence in trading when I lost a total of 20% of my trading capital in 2 days. Ever since then I have postponed my trading and am trying to learn of ways to manage my risk more effectively and I am intrigued to the use of options to transfer risk. I was just wondering, how do you obtain data on historical volatility and implied volatility? From what I have read, historical volatility is the actual volatility that coincides with the current price of the option, however, implied volatility is not as black and white as that. I was just wondering, is there any software or calculations that can assist me in determining an accurate implied volatility rate for a given option or is it more artsy and requires some estimations and guesswork?

Regards,

Marco Susilo

American Style Option VS Europeon Style Option

joshuaexcavating@yahoo.com — Fri, 02 Jul 2010 14:51:16 GMT

Is there a market "broker" for American style options for US retail clients? I have found many brokers for the European style, but for the American style.

Follow up question on BRL - Bond hedge

bond — Tue, 15 Jun 2010 14:57:19 GMT

Dear Steve,

please excuse my very limited knowledge of FX Options but would I not buy PUTS instead of calls, for example if I have a potion of BP
( which thanks to GOD I do not ) and I am afraid it will go down I would buy a PUT on BP to hedge,..when buying calls on BRL I would earn money if BRL goes up and US$ down, so for example if BRL raises from 1.78 ( current ) to 1.75 to the US$,- as our bond position will pay us back in BRL and we need to cover a credit line in US$, if BRL looses in value we get less US$ than we need to cover the credit, so a falling BRL against the US$ is the problem we like to cover,..

We could also sell a covered call - and earn the premium - but that might be a problem as the expiration of the bond trade does not go inside with Option expiration.

One more question is ( please ) what number of puts / calls I need to buy to hedge my position for each 1 mill US$ worth of BRL bonds as the currency of settlement is always US$ with BRL bonds
such as the KFW bonds,..

Is there a chance to talk to you Steve - phone ? Before we open an account - happy to pay for your advice,..

many thanks

BOND

Real FX Option to hedge Bond position

bond — Mon, 14 Jun 2010 00:54:20 GMT

Steve, I am new to FX options, I am planing to buy a bond in Real that pays a nice coupon and like to hedge my currency risk US$/Real as I am borrowing the US$ to buy the bond - the bond expires in Mid 2012 - so NDF's ( that I am considering ) are mostly offered for just 1 year, - so I would need to roll them over 2 1/2 times - or I could use BRL options, buying PUTS to hedge the currency risk - what do you suggest is the best strategy here ?

kind regards

BOND