Headquarters: | Seychelles: office 10, floor 2, Vairam Building, Providence Industrial Estate, Providence, Mahe, Seychelles Cyprus: office 102, 13/15 Grigori Afxentiou, 4003, Limassol, Cyprus |
Foundation Year: | 2012 |
Country: | Seychelles |
Email: | [email protected] |
Trade Platform: | MT4 for Desktop, MT4 Web Terminal, MT4 Android, MT4 iPhone Trader, MT4 iPad Trader MT4 Multi Terminal, MT5 for Desktop, MT5 Web Terminal, MT5 Android, MT5 iPhone Trader, MT5 iPad Trader, Platform for Android, Platform for iOS |
Acc Funding Methods: | Credit Card, Debit Card, Western Union, Perfect Money, Neteller, Skrill, FasaPay, Internal transfer, Local Deposits, Bitcoin, TrustPay, Boleto, Multiple local methods, Sticpay, PayTrust, PayRetailers, Payment Asia, Crypto, Absa , Help2pay, Pix |
Max: Leverage: | 1:3000* |
Min. Deposit: | 1 |
Base Currencies: | USD EUR GBP JPY MYR IDR THB VND KWD CNY ZAR |
Min. Spreads: | 0.2 pips |
The term forex options refer to a contract in which buyer has the right but not an obligation of selling or purchasing any particular forex spot for defined strike price before the expiry date. In such contract forex options premium means the payment buyer makes to seller for contract rights.
Initially, forex options trading developed as an OTC medium for banks and financial institutions with the aim of forex hedging their exposure to foreign currencies. Another thing about forex options is that it is known as inter-bank market similar to the spot market but with time forex options trading has become common with large corporations as well as individual investors who want to hedge their exposure to other currencies. The advantage of forex options trading is that it provides flexibility in deciding forex hedging and trading strategies to investors.
A Forex Options Transaction
In forex options transactions buyer can decide whether to sell the contract before it expires or hold it till expiration and then take position in the specified spot forex. The decision to take position in the spot market is commonly known as assignment. The primary obligation of the buyer is to pay the premium amount upfront to the seller at the time forex option is purchased.
Expiration of Forex Options
Forex options will expire worthless in case strike price is what is known as out or money. Simply it means that spot price is less compared to strike price of call option. If the forex option becomes worthless then both parties; seller and buyer will not have any obligation towards the other.
Extrinsic and Intrinsic Values
A Final Note
To conclude we can say that forex trading options are quite useful and proper utilization of forex options can be beneficial for investors. Additionally, having proper information about the roles of buyers and sellers in forex option contracts will guide you in making the right decision at the right time.