Forex options are slowly being introduced and these provide a buyer with the right but not the obligation to sell or buy an amount of forex at an exchange rate and a date specified in advance.
For example, a forex trader may bet on the price of the EURASIA going to the rate of 2.1222 on July 31st 2009. He can then buy currency options at the rate of 2.1190 . If the price goes above this, the forex trader will still have the option to buy the currency at 2.1190 even if the price has risen to 2.1222 and then resell the currency at the open market for a profit. If the market does not reach 2.1190, the currency options trader has no obligation to buy the currency.
To be able to buy the currency options, the forex trader must pay a premium to the writer of the option which is normally the bank or the forex broker.
1 comment:
Hello!
I am an affiliate program manager for InstaForex Group – the Best Broker in Asia.
We would like to offer you the affiliate program cooperation with InstaForex. If you are interested to get involve in high commission based program, please contact me and I will provide the details.
If you have any queries, do not hesitate to contact me.
Post a Comment