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Forum Newbie
Group: Forum Members
Last Login: 6/2/2010 6:07:48 PM
Posts: 6,
Visits: 12
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Steve,
What is the purpose or benefit of trading european style options? I see it as a disadvantage since it can only be exercised on one day. How do we take profits before the option expires?
Also, how do I trade options on GBP\JPY or EUR\JPY?
Thanks,
B
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Forum Guru
Group: Administrators
Last Login: 6/13/2011 7:57:49 PM
Posts: 54,
Visits: 375
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| European style options are the preferred style for most index products, reducing the uncertainty of early exercise. The early exercrise feature allowed in American style options can create wider bid/ask spreads. ISE does not currently trade cross-pairs, all of our pairs include the USD. We are always considering new trading opportunities, we might list cross-pairs sometime in the near future. Thanks for your interest in ISE FX Options.
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Forum Newbie
Group: Forum Members
Last Login: 6/2/2010 6:07:48 PM
Posts: 6,
Visits: 12
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Steve, I found this on FX Options website:
Yes, FX Options can be traded throughout the day and
do not need to be held till expiration. Since they are
European Style, meaning they cannot be exercised
till expiration, investors that are short an option,
do not have to worry about early exercise risks.
Whether you are long or short, you can trade out of your
position at any time prior to expiration.
So if I'm long a call and I want to lock in my profit how do I do that with a European style option?
Thanks,
B
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Forum Guru
Group: Administrators
Last Login: 6/13/2011 7:57:49 PM
Posts: 54,
Visits: 375
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Traders can sell the FX option at any time to capture trading profits or losses. European style prevents early exercise, it has no impact on your ability to buy and sell the FX contracts at ISE.
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