Forex Online Option Trading
Investors are looking out for alternative investment that would offer huge profits and minimum risk exposure. Forex online option trading is a veritable emerging alternative instrument for traders who wish to profit from forex investments. This method allows for high earnings from the forex market. A forex option is an undertaking that allows the holder the ability to buy or sell a defined contract of forex spot at a precise amount in a specific period of time. The FX holder is obliged to sell the FX option undertaking or to withhold the undertaking until it expires.
Forex online option was introduced around 2007 for clients that were willing to deal on world currencies. Philadelphia Exchange brought into effect options trading and they were traded in a similar manner like any other option. Forex online option trading was introduced to eliminate the load and risk of trading foreign exchange via the FX market and in the form of futures. You can trade the forex online option virtually through any online broker with an options dealing desk. In the currency market currency pairs are represented in pairs but on forex online option trading its representation is different. For instance the Euro and USD is shown as XDE.
The options’ trading is divided into put option and call option. The put option gives the buyer the power to sell, while the call option gives the buyer the ability to buy a specified amount of the currency. The foreign exchange option is divided into two; we have the vanilla options and the exotic options. The variables they incorporate basically make them differ.
There are lots of merits that the forex online option trading offers which lures a lot of investors. It offers less risk as compared to the online forex trading, as we can apply stops here to reduce further loss. You can afford to stay in a secured position for a longer duration due to the limited amount of risk. With currency options you can now identify the direction of the trend and you can sell based on its triggers when the markets go down and buy when the markets is up.
Before we had these wonderful trading experiences with forex online option trading, investors who ventured into the financial market did so via forex market makers and forex futures. It is evident the enormous difficulties faced by a lot of people who trade via forex market makers and forex futures and the complexity of the currency market. This reinforces our understanding of the unlimited losses that majority of speculators faced during periods when positions moves against them.
So many opportunities can be derived from trading forex online option. Investors can only get the cost of the option placed at risk. We now have an emergence of online brokers in the forex options arena and it has also lured even more investors, as it stands to boost investor’s prospects in the currency market. Forex online option trading is a good diversification tool for investors who want to venture into something new.
it looks like same article as your previus one nothing new in it.
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Originally posted by sadscorpionit looks like same article as your previus one nothing new in it.
Was there another article about options trading vs forex trading?
If we look at this article, not much information is given abt differences between forex and options trading. But I agree with the bottom line that option trading is attracting a lot of investors coz it is less risky as compared to forex.
The good or ill of a man lies within his own will. – Epictetus
One thing I noticed about option trading... It's a more related trading with gambling. It's like somewhere in the middle between gambling and forex trading since you just bet on markets. What do you think?
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Originally posted by megrawabOne thing I noticed about option trading... It's a more related trading with gambling. It's like somewhere in the middle between gambling and forex trading since you just bet on markets. What do you think?
I agree with you megrawab.
Its very similar to gambling. I think we can say that option trading is gambling. In it you choose the point where the price will reach and you set ur price and it starts.
Stick to your rules
Does anyone here has experience of option trading? Actually I dont think it is better than forex in any way. In option trading we define that price will be up or down. So in option trading there are high chances of loosing everything. In forex u can lower ur drawdown by stopping trade at any time.
But its all my opinion. An experience option trader can tell better abt it.
Originally posted by illiterateDoes anyone here has experience of option trading? Actually I dont think it is better than forex in any way. In option trading we define that price will be up or down. So in option trading there are high chances of loosing everything. In forex u can lower ur drawdown by stopping trade at any time.
But its all my opinion. An experience option trader can tell better abt it.
ur lines say that option trading is riskier than forex. I dont think so. Even the above article explains why it is not riskier. Actually in option trading u just have to mention where the price is going. You profit in option trading is more than forex. But if we look at the other side of this gambling, it can wipe ur account faster.
Overall, it is less riskier coz its profit is high. You risk less amount to get high return.
Stick to your rules
ur lines say that option trading is riskier than forex. I dont think so. Even the above article explains why it is not riskier. Actually in option trading u just have to mention where the price is going. You profit in option trading is more than forex. But if we look at the other side of this gambling, it can wipe ur account faster.
Overall, it is less riskier coz its profit is high. You risk less amount to get high return.
I am talking about the risk in totally different way. You r talking abt RRR. Actually option trading has high return but high risk too. Option trading is a type of gambling so u cannot limit ur losses once u execute an order. In forex u can limit ur losses even if u enter a trade.
If we talk abt high rewards and risks then forex trading has this option in the form of leverage.
I think just like forex you can also win in binary options through analysis but unlike forex by which you can make atleast a wild estimate in your win-lose ratio, with binary options, it's like 50:50 win or lose. It also seems to be riskier for me since in forex you can wait for the market to recover when you lose (though not recommended by the experts) and you can set your own time when to close a trade while on options, there is a predefined time for which you cannot extend, etc. So for me if forex trading is a cousin of gambling, options trading is it's brother... lol
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Traders who have good experience of these markets can go ahead with options trading but it requires better and accurate analysis to figure out the prices and also it is more risky to do so , any trader without prior experience should not trade OPTIONS.
Forex option is also an good idea and we can make upto 80% profit through it but it require a high amount of knowledge and experience so that we can be sure on guessing the market.