How Do You Buy Foreign Currency Options?
Buying and selling currency options can be a profitable exercise, though traders need to expect wide swings in profitability. Currency options give the buyer a large leverage factor but only a limited, definable risk that is known before the trade takes place. It is the expiring time value of the option that the trader is in risk of losing. This is called the premium. Buy options in the following manner: open an account with a recognized foreign exchange dealer. A recognized dealer is authorized through the appropriate regulatory authority in the country you reside–not in the currency you are trading. Deposit at least the minimum required to open the account, and be prepared to wire more monies if you intend to actively trade or wish to increase the position you took on. Buy currency options for speculation. By using options instead of forex, you gain the ability to know at the outset how many dollars you can lose. Currency options give you the right but not the responsibility to assu
