What Is Forex Option?
Forex option.In finance, a foreign exchange option (commonly shortened to just Fx option or currency option) is a derivative financial instrument that gives the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date.
The IS survey said in 2013 which was the latest one that there was over 300 billion US dollars equivalent going through the FX option market / trading day, That is larger than the flow through the world’s equity exchanges.
What happens is that you. Asia wakes up and there’s a certain amount of trading and then Europe and London come online level picks up.And then for about two hours after lunch when New York and London are all trading.That’s the very highest volume and I managed to get some figures from our own flow.
Which shows us really really beautifully then it starts to tail off a little bit the end of the London day is the end of the high flow and then America will continue bit in New York then San Francisco will put it to bed and then you’ve got of just a few hours we’re very little happens before Asia wakes up again . you know one of the reasons it’s so large is it is this 24-hour market.
can make money systematically buying or selling options turns out you can now I’m not recommending that this is you a surefire trading strategy because while selling short-dated options is profitable long-term of course it’saren’t playing with fire it has very severe draw downs and so, I would not recommend that as a kind of naked strategy nevertheless over the long time.
It long term it has a positive return so if you can work out how to limit your losses that might be part of a of a reasonable investment strategy buying some longer-dated options in particular put options that’s also historically being a great and a positive return strategy but it’s not a get-rich-quick.strategy it’s not a get-rich-quick strategy you can’t bias and then the next day see above you must wait that year so there’s certainly opportunities.