Forex Options Strategy
You must have heard about George Soros; the man who made a cool $1 Billion profit in just a few days with a single currency bet. In the early 1990s, he speculated on the price of British pound being too overvalued.
He purchased $10 Billion of puts and calls forex options by gambling all the assets under his control as collateral on a single bet that in the end made history.
George Soros had perfect knowledge of the currency markets. He was sure of his bet and had the conviction that the Bank of England could not prop the overpriced British pound for long. His conviction was shared by other currency speculators. The only difference between him and them was the huge amount of the bet he placed. Bank of England was forced in just of 24 hours to take the British pound out of the European Monetary System and let it float freely. His gamble had paid off.
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
Spot, futures and options are three contracts that are traded on centralized exchanges and available to you as a retail forex trader. Swaps and Forwards are two more contracts traded in forex markets for hedging by large institutions like big banks, multinational corporations and off course hedge funds.
Lets discuss trading forex options. Options are derivative products that give you the right to buy or cell or certain underlying asset at a predetermined price known as a strike price before or on a certain date known as the exercise date.
In case of a forex options the underlying asset is the currency. Now, forex options give you the right to purchase/sell a certain amount of a particular currency on payment of a premium.
You may or may not exercise your right to buy/sell the currency. If the market price of the currency is above/below your strike price, you can buy/sell that currency by exercising your option.
If the currency market price is below/above the strike price of the forex options contract that you had purchased by paying a small premium; you can simply let the options contract expire. You only lose the premium.
There is a very good forex options strategy that lets you profit from the currency markets in whatever direction it is moving. You can profit regardless of the direction of the market.
This is a risk free method but it only guarantees 30-50% ROI. If you are satisfied with this much sure shot return you can try this method. - 23204
He purchased $10 Billion of puts and calls forex options by gambling all the assets under his control as collateral on a single bet that in the end made history.
George Soros had perfect knowledge of the currency markets. He was sure of his bet and had the conviction that the Bank of England could not prop the overpriced British pound for long. His conviction was shared by other currency speculators. The only difference between him and them was the huge amount of the bet he placed. Bank of England was forced in just of 24 hours to take the British pound out of the European Monetary System and let it float freely. His gamble had paid off.
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
Spot, futures and options are three contracts that are traded on centralized exchanges and available to you as a retail forex trader. Swaps and Forwards are two more contracts traded in forex markets for hedging by large institutions like big banks, multinational corporations and off course hedge funds.
Lets discuss trading forex options. Options are derivative products that give you the right to buy or cell or certain underlying asset at a predetermined price known as a strike price before or on a certain date known as the exercise date.
In case of a forex options the underlying asset is the currency. Now, forex options give you the right to purchase/sell a certain amount of a particular currency on payment of a premium.
You may or may not exercise your right to buy/sell the currency. If the market price of the currency is above/below your strike price, you can buy/sell that currency by exercising your option.
If the currency market price is below/above the strike price of the forex options contract that you had purchased by paying a small premium; you can simply let the options contract expire. You only lose the premium.
There is a very good forex options strategy that lets you profit from the currency markets in whatever direction it is moving. You can profit regardless of the direction of the market.
This is a risk free method but it only guarantees 30-50% ROI. If you are satisfied with this much sure shot return you can try this method. - 23204
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 @ 5:30 AM
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